As 2020 slowly becomes the normal during this week, so does mortgage interest rates increasing. Although they are not increasing dramatically they are slowly rising. With December ending mortgage rates were at a low 3.73% and have already climbed five basis points since. This is the case for both 15 and 30 year fixed rate mortgages.
When they are tracking future interest rates typically they look into the Federal Reserve and Treasury yield. Based on those it is estimated that if the economy does not take a downturn then the interest rates will stay most likely around the 4% area.
When you are looking into buying a home it is best to look into what happens when mortgage rates increase and decrease. As previously said, they are mostly dependent on how the economy is doing. Last November mortgage rates climbed to 5% which was the highest we have seen in some time. Mortgage rates are all dependent on how much money is avaliable to lend to people. If there is no money then interest rates are going to climb so that the lenders can make a profit to back future loans going forward. This is why having a strong economy is something that you want if you are looking for low interest rates for a future home that you are buying.
It is very important that we keep interest rates low because that is what makes it possible for people to afford their monthly payment. If the interest rate is extremely high then it makes their monthly payments unmanageable which will drive a housing crisis.