Another Sign The Mortgage Rates Will Rise

I saw a great graph from Zelman & Associates on mortgage rate volatility during every year this century. This graph shows the difference the between the lowest weekly average rate during the year according to Freddie Mac and the highest weekly average rate during the year.

Since 2000 the smallest difference between the 2 was 50 basis points; but on average its been 101 basis points. This means the low rate for the year was 3.00% and the high rate was 4.01%.

Why do I tell you this? The low rate this year was 2.65% during the first week of January. If this year is an “average” year don’t be surprised if mortgage rates hit 3.66%. But, anyone who believes this year will be an “average” year should have the head examined. Thus, don’t be surprised if we see a higher high rate this year near 4% or just above 4%.

Logan Mohtasahmi from Housing Wire, one of my favorite writers, said last week he thinks the trillions in stimulus dollars will send mortgage rates above 4% this year and possibly even to 5%. But, Logan believes this will be short-lived as the stimulus effects dissipate by early 2022.