Mortgage rates increased yet another week, leading one expert to say mortgage activity could be significantly subdued in 2017.
“As was almost-universally expected, the FOMC closed the year with its one-and- only rate hike of 2016. The consensus of the committee points to more rate hikes in 2017,” Freddie Mac Chief Economist Sean Becketti said. “However, the experience of this year combined with the policy uncertainty that accompanies a new Administration suggests a wait-and- see outlook.”
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(Source: Freddie Mac)
The 30-year fixed-rate mortgage increased to 4.16% for the week ending December 15, 2016. This is up from last week’s 4.13% and from last year’s 3.97%.
The 15-year FRM also increased slightly to 3.37%, up from 3.36% last week and 3.22% last year.
The five-year Treasury indexed hybrid adjustable-rate mortgage increased to 3.19% this week, up from 3.17% last week and 3.03% last year.
“This week’s mortgage rate survey was completed prior to the FOMC announcement,” Becketti said. “The 30-year mortgage rate rose three basis points on the week to 4.16%.
“The MBA’s Applications Survey posted drops in both refinance and purchase applications, registering the impact of recent mortgage rate increases,” he concluded. “If rates continue their upward trend, expect mortgage activity to be significantly subdued in 2017.”
But other experts disagree with that prediction, saying the demand for housing will continue to strengthen. TransUnion even suggests the market could see an influx of 3 million new first-time homebuyers.
Click here to see why housing experts seem so divided on next year’s predictions.
