Mortgage Rate Forecasts for Bay Area Home Buyers, 2016 – 2017

Are you planning to buy a home in the Bay Area sometime soon? Will you be using a mortgage loan to finance your purchase? If you answered yes to both questions, you might find these mortgage rate forecasts useful.

According to both Freddie Mac and the Mortgage Bankers Association (MBA), 30-year loan rates could rise gradually through the end of this year and into 2017. That’s the general consensus among housing analysts and economists with these two organizations.

Mortgage Rate Forecasts for Bay Area Home Buyers

Mortgage rate forecast #1 comes Freddie Mac, the government-controlled company that purchases loans from lenders. According to Freddie Mac’s economic and housing research team, 30-year mortgage rates could rise to 4.5% by the start of 2017 and continue moving north through the end of next year.

Here is their forecast for 30-year loan rates between now and the end of 2017. These are the average rates they expect to see during each quarter.

• Q2, 2016: 3.9%
• Q3, 2016: 4.2%
• Q4, 2016: 4.4%
• Q1, 2017: 4.5%
• Q2, 2017: 4.7%
• Q3, 2017: 4.9%
• Q4, 2017: 5.1%

As shown here, the economists at Freddie Mac feel that 30-year mortgage rates will rise gradually this year and into 2017. If you’re a Bay Area home buyer, this is certainly a trend you’ll want to watch.

By comparison: The average rate for a 30-year loan at the time this article was published (August 1, 2016) was 3.48%, according to Freddie Mac’s weekly market survey.

Rate forecast #2 comes from the Mortgage Bankers Association. By their estimation, the average rate for a 30-year fixed home loan will rise more slowly than what Freddie Mac has predicted. They expect that the 30-year average will climb to 4% during the first quarter of 2017, and continue rising gradually through the end of next year.

• Q2, 2016: 3.6%
• Q3, 2016: 3.6%
• Q4, 2016: 3.8%
• Q1, 2017: 4.0%
• Q2, 2017: 4.1%
• Q3, 2017: 4.3%
• Q4, 2017: 4.4%

One could argue that this is the more realistic of the two forecasts, because it more closely reflects where mortgage rates are right now. It’s also the more conservative of the two projections — MBA does not expect rates to rise as high as Freddie Mac’s forecast.

But we’re splitting hairs here. The broader outlook is more important than the exact numbers. The key takeaway here is that economists and housing analysts believe mortgage rates will gradually rise between now and the end of this year, and throughout 2017.

Rates Vary Based on Borrower Qualifications

Just keep in mind these are forecasts, not facts. This is what Bay Area home buyers and mortgage shoppers could see in the months ahead. They are an educated guess based on economic trends that are ever-evolving.

Additionally, mortgage rates vary based on an individual borrower’s qualifications. For example, a borrower with an excellent credit score might qualify for a lower rate than someone with credit problems in the past. So you have to take these average numbers and forecasts with a grain of salt.

Related: California mortgage rate outlook

Get a Quote Today

Bridgepoint Funding has simplified the mortgage quote process. We offer online tools that allow you to get a rate quote quickly and easily. So you can start there, if you like. Or you could call and speak to one of our knowledgeable staff members. We offer a variety of loan programs, including FHA, VA and conventional. Please contact us with any questions you have. We look forward to helping you!

Disclaimer: This article includes mortgage rate forecasts and predictions made by third parties not associated with our company. We have simply compiled this information as an educational service for our readers. Mortgage rates tend to vary based on geography, loan features, and credit qualifications.