Mortgage rates have recently started to increase again, after hovering at or just above record lows for months. And with most economists predicting the economy will boom – as more Americans are vaccinated and COVID-related restrictions are lifted – there is an expectation that they’ll climb even higher.
But despite those expectations, Fannie Mae’s Economic and Strategic Research Group says it shouldn’t be a major concern. “At the moment, economists’ eyes are on interest rates given the size of the recent increases to Treasury and mortgage rates and the short time period over which those changes occurred,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, said.
“Perspective is helpful here: While we forecast some continued upward movement, mortgage rates remain historically low, as they are still 0.8 percentage points below the 2019 average.” In other words, though rates have increased, they are still low when compared to what’s been typical in years past. Fannie Mae expects any upcoming rate increases won’t affect housing activity in the near term, though they do expect refinance demand to dip. (source)