June 21st marked the first day of summer, so we thought it was a good time for an updated look at mortgage rate trends in New Jersey. Here are the latest developments and forecasts relating to mortgage rates, as we move into the Summer of 2018.
Average Rates Hover Around 4.6% at Start of Summer
The first thing you should know is that average mortgage rates in New Jersey and nationwide are now higher than they were at the start of the year. This is based on the weekly survey conducted by Freddie Mac, and similar surveys.
At the start of 2018, the average rate for a 30-year fixed home loan was just below 4%. That average rose steadily during the first part of the year, and it has been hovering around 4.6% for the last few weeks.
According to the latest industry survey from Freddie Mac, 30-year mortgage loans held an average rate of 4.57% during the week ending June 21, 2018. A few weeks earlier, their survey rose to its highest point of the year, with the average rate for a 30-year mortgage loan cresting at 4.66%. They’ve come done a bit since then, but they’re still higher than at the start of 2018.
“After a sharp run-up in the early part of 2018, mortgage rates have stabilized over the last three months, with only a modest uptick since March,” the company’s economists stated.
Granted, mortgage rates in New Jersey can vary from one borrower to the next, and for a variety of reasons. The type of home loan you use, the size of your down payment, and your credit score are all factors that can influence the interest rate you receive on a mortgage loan.
Please contact us if you’d like to receive a rate quote tailored to your particular situation.
15-Year Mortgages Loans Offer Lower Rates
As usual, 15-year fixed mortgage loans had lower rates (on average) than the longer-term 30-year loan. As of June 21, the first day of summer, 15-year fixed mortgages held an average rate of 4.04%. That was 53 basis points (or 0.53%) lower than the average rate assigned to the more commonly used 30-year loan.
The conventional 30-year fixed mortgage loan is by far the most common type of loan used by borrowers in New Jersey and nationwide. By spreading the repayment over a longer period of time, borrowers are able to reduce the size of their monthly payments, and that’s a top priority for a lot of home buyers and homeowners.
However, the shorter 15-year fixed mortgage, while less popular, is a good option for those borrowers who want to minimize the amount of interest they pay over the long term. On average, 15-year home loans tend to have lower rates than their 30-year counterparts, and you’re also paying it for a shorter period of time.
Forecasts: Borrowing Costs Could Rise Further
No one can predict future the of mortgage rate trends in New Jersey with complete accuracy. There are just too many variables involved, and too many unknowns regarding economic conditions down the road.
Still, economists and housing analysts routinely make predictions for mortgage rates based on current trends and future expectations. The latest mortgage rate forecasts suggest that borrowers could see higher rates over the coming months.
At the start of summer 2018, the general consensus among economists was that rates would gradually climb through the end of the year and into 2018. Here are two such predictions:
- MBA: A June 15th forecast from the Mortgage Bankers Association (MBA) predicted that the average rate for a 30-year mortgage loan would rise to 4.9% by the fourth quarter of 2018. Looking beyond that, the industry group expects 30-year loan rates to average around 5% at the start of 2019, and climb gradually throughout next year.
- Freddie Mac: In a rare instance of “forecast alignment,” the economists from Freddie Mac made an identical prediction for the rest of this year. A June 21st news release from the company stated that “The 30-year fixed-rate mortgage rate is forecasted to average 4.9 percent by the end of the year.”
Note: This article includes predictions made by third parties not associated with our company. We have compiled them here as an educational service to our readers.