Mortgage rate forecast Q4: Will the low rates continue? | Money

However, Ken H. Johnson, a housing economist at Florida Atlantic University, is less optimistic about a quick economic recovery. “Rates will remain low for at least another year,” he says. “I just do not see full or near-full economic recovery until COVID-19 no longer or minimally impacts the economy.”

— Economic recovery could boost rates

Greg McBride, CFA, Bankrate’s chief financial analyst, sees rates holding steady in the coming year. “Mortgage rates will remain at historically low levels and in no way be an impediment to well-qualified borrowers, but they won’t be quite as low as what was seen in the summer of 2020,” he says. “A refinance fee taking effect in Q4 2020 and further economic improvement will push rates a bit higher.”

Audrey Boissonou of Guarantee Mortgage in Walnut Creek, California, says the direction of the economy will prove crucial. “I’m locking people in in the high 2s right now,” she says. “I am seeing nothing that makes me think rates will go up. Of course, it all depends on what happens in the next few months. It can all change on a dime.”

Predicting rates is always a challenge, as Boissonou notes. But if the Fed’s attitude is any indication, then rates could remain low over the next year.

The Fed has set a pattern of keeping long rates low in challenging times, says William Emmons, the lead economist at the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis. “The demonstrated willingness of the Fed is to do the old cliche of ‘whatever it takes,'” says Emmons, who adds that he doesn’t state the Fed’s official position. “That’s pretty widespread, the belief that the Fed will do whatever it takes.”

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