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Here’s what mortgage rates will do next year, from the people who usually get it wrong

MarketWatch logo MarketWatch 12/16/2018 Andrea Riquier
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Rates for home loans have spent the past decade or so doing anything but what’s expected of them. Every year, it seems, the general consensus is that in the coming months, financial conditions will finally get back to “normal,” taking mortgage rates with them. And every year something has brought that “normalization” to a screeching halt.

In 2015, for example, shock-and-awe bond-buying by the European Central Bank helped push bond yields into negative territory in Europe and behind. In early 2016, markets were rocked so badly by concerns about earnings that there were fears of another recession – and then rocked again by the upset Brexit vote.

2017, which started off with concerns about surging bond yields under a pro-growth, anti-tax president, instead saw many months of a “Trump slump” when tax reform took a while to materialize.

Mortgage rates in 2018 may be the closest thing to “normal” we’ve seen in a long time. With two more weeks in the year as of this publication, we’re likely to see a full-year average of 4.54% for the 30-year fixed-rate mortgage. That will be the highest since 2010.

And for 2019? Given all the variables in both financial markets and housing, forecasting mortgage rates is for the “intrepid,” in the words of Mark Zandi, chief economist for Moody’s Analytics, and a long-time housing watcher. And those are just the known unknowns. Who can guess the curveballs lying in wait in financial markets, earnings, economic data, housing markets, and beyond?

With that in mind, here are some thoughts from a few of those “intrepid” souls.

NameInstitutionForecast, full-year average, 30-year fixed-rate mortgage
Sam KhaterFreddie Mac5.1%
Danielle HaleRealtor.com5.3%
Mark ZandiMoody’s Analytics5.0%
Sam BullardWells Fargo Economics Group4.9%
Rick ShargaCarrington Mortgage5.25%
Mike FratantoniMortgage Bankers Association5.1%
Doug DuncanFannie Mae4.8%

Also see:Americans’ fascination with ‘mortgage rates:’ a tour through financial market history

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