2020 mortgage and refinance rates forecast from experts

What to expect from mortgage rates in 2020

Mortgage rates hit near-record lows in 2019. They were far better than anyone expected, and home buyers and refinancing homeowners did nicely.

But if you missed your chance to lock a historic mortgage rate in 2019, will the window close in 2020?

Experts think not.

We talked to 10 trusted real estate experts, and the majority agreed that:

• Mortgage rates look like they’ll stay sub-4% through 2020
• Continuing trade wars and economic instability worldwide should keep rates low
• There’s a chance the Fed could cut rates once or twice more in 2020 to counteract a slowing U.S. economy

Of course, a prediction is far from a guarantee. Many experts believed mortgage rates would spike into the 5s’ in 2019, and in fact, the opposite came true.

Don’t hesitate to lock if you get a good rate quote today, even though rates are predicted to stay low. As history shows, mortgage rates can take even the savviest experts for a ride.

2020 mortgage and refinance rate predictions

We reached out to 10 trusted real estate experts for their mortgage and refinance rates forecast for next year. We got them to estimate where 30- and 15-year fixed-rate mortgage rates will be by mid- and late 2020.

Their mortgage rate predictions could be valuable if you’re thinking about buying a home or refinancing your current one heading into next year.

Lawrence Yun

Expert: Lawrence Yun, chief economist for the National Association of Realtors

Mid-2020 rate forecast: 30-year loan: 3.7%. 15-year loan: 3.0%.

Reasons why: “Rates will be higher if inflation picks up due to tariffs filtering up as higher prices. The effect is likely to be muted with a slower economy, but do not underestimate the negatives of higher tariffs.”

Late 2020 rate forecast: 30-year loan: 3.7%. 15-year loan: 3.0%.

Reasons why: “The budget deficit will get larger. That puts a lot of pressure on Treasury to find buyers of U.S. bonds, and if foreigners do not step in then mortgage rates will get pushed up along with other bond yields.

“Finally, a reform of Fannie Mae and Freddie Mac is likely to have government guarantees, but if they are privatized fully mortgage rates will move higher.”

Rick Sharga

Expert: Rick Sharga, president, CJ Patrick Company

Mid-2020 rate predictions: 30-year loan: 3.7%. 15-year loan: 3.3%.

Reasons why: “Rates will continue to stay low, in large part because of global issues such as the trade wars between the United States and China and the economic slowdown of major countries like Germany, France, and the UK.

“Continuing weakness and volatility in these international markets is driving more and more capital into US Treasuries, which drives down yields. This has a major impact on long-term interest rates, and should keep rates on both the 30-year and 15-year mortgages near historic lows.”

Late 2020 rate predictions: 30-year loan: 3.8%. 15-year loan: 3.4%.

Reasons why: “It’s likely that the Federal Reserve will cut its Fed Funds rates a few more times over the next year. While that doesn’t have a direct effect on mortgage rates, it does contribute to the overall low interest rate environment.”

Robert R. Johnson

Expert: Robert R. Johnson, finance professor, Heider College of Business, Creighton University

Mid-2020 rate forecast: 30-year loan: 3.14%. 15-year loan: 2.75%.

Reasons why: “According to the CME Fed Watch Tool, there is over an 80% probability of a 50-basis point cut in the Fed funds rate. Since the current 30-year fixed rate averages 3.64%, I believe we will see rates about 50 basis points lower than the current level.”

Late 2020 rate forecast: 30-year loan: 2.89%. 15-year loan: 2.60%.

Reasons why: “Given current conditions, and the likelihood of weakening economic conditions next year, I believe we could see another drop of 25 basis points in mortgage rates.

“Unsurprisingly, it is all about the strength of both the US and global economies and the Federal Reserve Board of Governors’ response to economic conditions. If conditions further weaken and the US economy goes into recession, we will likely see significantly lower mortgage rates.

“On the other hand, if the trade war with China is resolved and the US economy strengthens, we could see somewhat higher mortgage rates.”

Ralph DiBugnara

Expert: Ralph DiBugnara, president, Home Qualified

Mid-2020 rate trend: 30-year loan: 4.25%. 15-year loan: 3.75%.

Reasons why: “There is a lot of uncertainty of what will become of interest rates because of the change of philosophy recently by the Fed.”

Late 2020 rate trend: 30-year loan: 4.5%. 15-year loan: 4.0%.

Reasons why: “One definitive factor that may play a factor in what direction rates go is how the real estate market responds to recent cuts.

“We have seen a downturn in prices and buying in some major markets like New York City and San Francisco. Historically other markets are not far behind these big-city market trends when it comes to housing. If we see a lower percentage of homes being sold I believe we will see rates stay low.”

Bruce Ailion

Expert: Bruce Ailion, Realtor and real estate attorney

Mid-2020 rate: 30-year loan: 3.625%. 15-year loan: 3.5%.

Reasons why: “We see slowing growth in China and worldwide, unknown outcomes from Brexit, the adverse impact of trade wars, hostility in the Middle East, and the potential collapse of firms like WeWork.

“We face many economic challenges that impact the instability in the economy. With this instability in the air and a general slowdown in growth, it is highly unlikely the Fed will move to increase the Fed Funds rate.”

Late 2020 rate: 30-year loan: 3.5%. 15-year loan: 3.375%.

Reasons why: “There are many people who expect interest rates to drop in 2020 below the current very low interest rates. A variety of factors, including the election and a slowing economy, will warrant moving interest rates lower to stimulate the economy. We continue to have stable and very low inflation, which supports that expectation. “

Ben Mizes

Expert: Ben Mizes, CEO/founder, Clever Real Estate

Mid-2020 rate: 30-year loan: 3.6%. 15-year loan: 3.16%.

Reasons why: “This prediction is based on a single reduction in the federal funds rate this year and none next year. It also takes into consideration this year’s predicted rate average of 4.1%. The fed funds rate is forecast to average 2.4% this year and 2.3% next year. In addition, the trade war has driven investors back to US bond markets, forcing interest rates to decrease.”

Late 2020 rate: 30-year loan: 3.4%. 15-year: 3.14%.

Reasons why: “This prediction is based on the perceived downturn in the economy. This perception is prompting investors to withdraw their funds from the stock market and place them into safer investments like treasury bonds and mortgage-backed securities.

“In addition, the Fed is unlikely to raise rates in an election year, while there is very little inflation. This is even more evidence that mortgage rates will stay low.”

Michael P. Goldrick

Expert: Michael P. Goldrick, chief lending officer for PCSB Bank

Mid-2020 rate forecast: 30-year loan: 3.625%. 15-year loan: 3.125%.

Reasons why: “Key drivers keeping rates low next year are US political policy and global concerns regarding the European Union and US/China trade negotiations.

“Other factors that may influence rates in 2020 are uncertainties regarding the strength and confidence in the US economy. Inverted yield curves and the large buildup of US debt can create a loss of confidence in the US economy and/or a potential push to devalue the dollar. Any of these factors would most likely lead to lower demand for treasuries and higher rates.”

Late 2020 rate forecast: 30-year loan: 3.75%. 15-year loan: 3.25%.

Reasons why: “My prediction is based upon the assumption of relative economic stability for election-year political purposes. And despite concern regarding the longer-term impact of the US debt, the good news is that rates are extremely low and should remain low.”

Colin Robertson

Expert: Colin Robertson, founder/owner, The Truth About Mortgage

Mid-2020 rate forecast: 30-year loan: 3.375%. 15-year loan: 2.875%.

Reasons why: “We’ve already had a wild ride in 2019. And 2020 looks like it’ll be no different. In fact, things could get even crazier next year with regard to the economy, politics, and the ongoing trade war. With that in mind, I see more downward pressure on rates.”

Late 2020 rate forecast: 30-year loan: 3.25%. 15-year loan: 2.75%.

Reasons why: “Since rates are already so low, it’s harder to achieve lower lows. In other words, any improvement will be fairly muted from here on out.”

James McGrath

Expert: James McGrath, co-founder, Yoreevo

Mid-2020 rate forecast: 30-year loan: 3.9%. 15-year loan: 3.3%.

Reasons why: “Both 30-year fixed and 15-year fixed mortgage rates are driven by the 10-year US treasury rate. But nobody knows where US government debt rates are headed. So nobody knows where mortgage rates are headed. The only responsible bet to make is they will stay flat, as that embeds all worldwide economic data available at the moment.”

Late 2020 rate forecast: 30-year loan: 3.9%. 15-year loan: 3.3%.

Reasons why: “The most direct influences on the 10-year US Treasury rate will be economic growth and inflation rates. If economic growth or inflation accelerates, bond yields — in the form of treasuries and mortgages— will increase. Conversely, if growth or inflation slows, treasuries and mortgage rates will decline.”

Jeremy Sopko

Expert: Jeremy Sopko, CEO, Nations Lending Corporation

Mid-2020 rate forecast: 30-year loan: 3.7%. 15-year loan: 3.0%.

Reasons why: “Increased global uncertainty continues to put downward pressure on interest rates. I’m not saying 0% could ever happen in the United States. But look abroad at Denmark’s situation as just one example of the downward pressure on long-term interest rates we’re seeing all across the world.

“At the same time, manufacturing is down, business borrowing is up, and wages remain relatively stagnant. The Fed is likely going to look for ways to counteract this to maintain some level of balance. One of the ways to do that is to keep interest rates suppressed.”

Late 2020 rate forecast: 30-year loan: 3.7%. 15-year loan: 3.0%.

Reasons why: “Watch out for another — and maybe then a second — rate cut in 2020 if the world economy continues along its current trajectory.

“Also, 2020 is an election year. Whether Trump is re-elected or a Democrat unseats him, I think we’re likely to see volatility because there’s a lot of uncertainty in both scenarios. Investors are likely going to pull back while they wait for the dust to settle.”

Act now or wait?

Many believe it’s smart to buy soon, if you can afford it.

“These historically low mortgage rates will not last forever,” says Sharga. “For those seeking to buy, It’s worth at least exploring a home purchase now. That’s because low interest rates can partially offset the high cost of homes in many markets.”

How a lower mortgage rate offsets a higher price tag

Johnson seconds that sentiment.

“Individuals considering taking out mortgages will find that there is no time like the present. Over the next few years, the likelihood that rates will be higher than today is greater than the likelihood that rates will be lower. And, timing the mortgage rate market is fraught with peril,” says Johnson.

“Over the next few years, the likelihood that rates will be higher than today is greater than the likelihood that rates will be lower” —Robert R. Johnson, Professor of finance, Heider College of Business

Ailion notes that any savings earned by waiting for slightly lower interest rates would be offset by higher home prices.

“I think it is wishful thinking to believe rates will go below 3% over the next 18 months,” says Ailion.

It may also be smart to think about refinancing soon. But that only makes sense if you can lower your interest rate and pay less over the life of your loan.

What you need to know about refinancing now

“Borrowers who currently have higher interest rate loans or adjustable-rate mortgages should at least strongly consider refinancing while they have this opportunity,” adds Sharga.

How do I lock in current mortgage rates?

Experts agree: If you’re considering buying or refinancing soon, don’t wait for lower rates. They’re more likely to go up than down.

Protect yourself against an unexpected rise by locking in now.