Where will 30-year Mortgage Rates be in 12 months?

I can’t tell the future, so answering this question is only going to be a projection.

Fortunately, I can ask a number of other experts for their point of view, and avoid being the only person trying to predict the future.

Fannie Mae, the Mortgage Bankers Association (MBA) and the National Association of Realtors (NAR) all give regular porjections as to where they think mortgage rates are going.

Let’s see what they think.

Mortgage Rate Projections

QuarterFannie MaeMBANARAverage
2017 3Q4.24.64.54.43
2017 4Q4.24.74.64.50
2018 1Q4.34.84.84.63
2018 2Q4.34.95.04.73

So the projections are higher than today’s rate and getting higher each quarter, which seems reasonable.

If you take a look at the following chart, you’ll see that these projections aren’t unreasonably high.

30 Year Fixed Rate Mortgage Rates

In the chart we can see the rate steadily coming down at first as the Federal Reserve did everything it could to fix the issues of the housing crash and the ensuing recession.

Then the rate varied over time as the economy changed until we got to where we are now.

Given where the rate has been in the past, it is not unreasonable at all to assume that it will now come back up again steadily as the Federal Reserve raises the base rate slowly over time.

Historic Mortgage Rates by Decade

DecadeAverage Rate
1970s8.86%
1980s12.70%
1990s8.12%
2000s6.29%

Conclusion

The projection is that we are likely to see gradual increases in mortgage rates over the next year.