I predicted in June that mortgage rates would hit 5% in the 3rd quarter and they finally have done that. It did take a little longer than I thought it would though as I expected the Fed’s fewer purchases of bonds would affect rates sooner than later.
It’s expected that the Fed will raise short-term rates next week by ¼% which is another reason why long-term mortgage rates have finally risen. Plus, our economy is ROARING thanks to deregulation, economic confidence by both businesses and consumers, and lower tax rates.
I won’t be surprised if rates rise to at least 5.50% next year on strong economic growth. Three or four years ago I thought we might never see mortgage rates above 5% as our economic growth slowed to 1-2% a year for several years, in what some economists called The Plow Horse Economy. But, our economy has been unleashed which causes rates to rise.