Prediction, Mortgage rates to increase past 4.5% in 2018. Mortgage rates usually follow the Treasury Yield, the federal funds rate sets the tone for the direction mortgage rates will take.
The Fed announced its final rate hike of 2017 in December at the end of its FOMC meeting, but implied more rate hikes are still to come in 2018 and beyond. After increasing the federal funds rate 25 basis points to a target rate of 1.25% to 1.5%, the Fed projected it would raise rates three times in 2018.
However, experts then predicted the Fed will later revise its rate hike forecast from three times in 2018 to four after they increased their GDP estimates.
One expert confirmed he continues to expect the Fed to increase its forecast for rate hikes in 2018.
“Overall, Fed officials re-affirmed at this meeting that they anticipate raising interest rates three times in 2018, matching the tightening in 2017, but we still anticipate that a slightly faster than expected rebound in core inflation will mean we eventually see four rate hikes in 2018,” Capital Economics Chief Economist Paul Ashworth said.
The Mortgage Bankers Association predicts rates will increase to 4.6% in 2018, 5% in 2019 and 5.3% in 2020.
The National Association of Realtors’ forecast was similar, saying it expects interest rates to end the year at 4.5%.
Realtor.com held a slightly higher outlook, saying mortgage rates will average 4.6% throughout the year, and reach 5% by the end of 2018.
Prediction, Mortgage Rates To Increase Past 4.5% in 2018
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