Will Mortgage Rates Top 4% Next Year?

The Mortgage Bankers Association released their Economic Forecast for the next 3 years. They see inflation doubling in 2021 from this year with an annualized inflation rate of 2.7% in 2021. However, they only see mortgage rates rising by 0.30% to an average rate of 3.3% for next year. I totally disagree. If inflation averages 2.7% next year I expect mortgage rates will average closer to 4% next year, which would mean mortgage rates may be over 4% by this time next year.

And if a vaccine(s) are approved and widely available economic growth will increase pushing rates higher. More COVID-19 disaster relief could also cause rates to rise next year as well. We currently are in a SWEET SPOT rate-wise that we may not see for much longer. This is why I have been telling people to buy your long-term home NOW if you can.