The interest rate for the 30-year fixed-rate mortgage averaged 3.9% for 2019, the fourth lowest annual average since 1971, according to Freddie Mac. For 2020, Freddie’s outlook mirrors that of the real estate industry’s top economists, who discussed their predictions at the National Association of REALTORS®’ first-ever Real Estate Forecast Summit earlier this month: Low mortgage rates and an improving economy will help drive steady home sales, construction, and increases in home prices.
“While the outlook for the housing market is bright, worsening housing affordability is no longer a coastal phenomenon and is spreading to many interior markets, and it is a threat to the continued recovery in housing and the economy,” says Freddie Mac Chief Economist Sam Khater. NAR Chief Economist Lawrence Yun, too, has long called for greater homebuilding in entry-level price points to satisfy affordability and housing demand for first-time buyers.
Freddie Mac reports the following national averages with mortgage rates for the week ending Dec. 26:
30-year fixed-rate mortgages: averaged 3.74%, with an average 0.7 point, mostly unchanged from last week. Last year at this time, 30-year rates averaged 4.55%.
15-year fixed-rate mortgages: averaged 3.19%, with an average 0.7 point, unchanged from last week. A year ago, 15-year rates averaged 4.01%.
5-year hybrid adjustable-rate mortgages: averaged 3.45%, with an average 0.3 point, rising from last week’s 3.37% average. A year ago, 5-year ARMs averaged 4%.