A Look at What 2019 Holds for Mortgages
As 2018 comes to an end, many people are starting to turn their eyes toward 2019. They’re also trying to predict what changes we may see in the mortgage market. While no one knows for sure, we may see the following three trends for mortgages in 2019.
Thirty-Year Mortgage Rates Will Hover Around 5 Percent: At the beginning of 2018, the average 30-year fixed mortgage rate was 3.95 percent. However, at the start of November, that average was up to 4.94 percent. This increase leads many industry analysts to predict that 30-year loan rates will stay around 5 percent for most of 2019. While this trend signals an increase in mortgage rates, most experts agree that rates will remain fairly stable throughout 2019.
Mortgage Lending Standards Will Become More Relaxed: The good news for borrowers is that plenty of industry analysts believe mortgage lending standards will become more relaxed in 2019. In fact, the criteria have already started to ease over the past year, and experts see no sign of this stopping in the coming year. Along with lessening criteria, major lenders are also allowing higher loan-to-value ratios and higher debt-to-income ratios. It’s generally easier to qualify for a home loan today than in previous years.
Refinance Activities Will Decline as Purchase Loans Dominate: When mortgage rates climb higher, refinancing tends to decline. Since industry experts believe we’ll see a steady rise in mortgage rates in 2019, they also think it’s safe to assume we’ll notice a decrease in refinance activities. However, because of this trend, we’re also likely to see an increase in purchase loans as more new buyers qualify for a home loan.
Source: Home Buying Institute