So What’s Happening With Mortgage Rates for 2020?
Mortgage rates are low and fairly stable. The coming year is predicted to continue with more of the same.
The Federal Reserve has indicated it will be keeping things in balance. It will continue to buy Treasury Bills, each month, to maintain liquidity in the market and keep interest rates low. In an election year ,the Federal Reserve tends to try to steady the market and remain on the sidelines. So, in all likelihood, this means more of the same, to keep the interest rates low and the market in balance.
The Mortgage market has been very stable in recent years with low delinquency rates.
The percentage of loans newly in foreclosure fell to 0.23%, compared with 0.25% in the fourth quarter of 2018 and 0.28% a year earlier. The seriously delinquent rate – the percentage of loans 90 days or more past due – dropped across all loan types from the previous quarter to 1.96%, the lowest level since the second quarter of 2006. The so-called foreclosure inventory, meaning the share of all loans in foreclosure, was 0.92%, the lowest level since 1995.
In this stable mortgage environment, with low interest rates, we are beginning to see a loosening of mortgage guidelines. There are many instances where both purchases and refinances are receiving an appraisal waiver. The conventional loan limits in Maricopa County have increased to $510 400 and FHA to $331 760.This allows a greater portion of loans to fall under the conventional umbrella. Low down payments are available for those that qualify.
In addition, there has been significant growth in Non QM loans. A non QM loan is a loan that is not controlled by the Consumer Protection and Financial Bureau. These include loans that most frequently serve those who are self-employed, have non W’2 type employment, and investors. They include loans qualifying using bank statements, or asset depletion and investment income.
In 2020, it is likely that inflation will remain low, as will unemployment, and employment will continue to be strong. Geopolitical upheavals could create volatility but when the China Trade Part 1 is signed, this may not be as significant turmoil as we have recently seen. Overall, it seems we will have a continuance of low interest rates in 2020.
Robyn Robertson, a licensed Mortgage Professional with Suburban Mortgage in Scottsdale, Arizona. You can reach Robyn at firstname.lastname@example.org, and direct at 480-355-8106. NMLS#203304 and Suburban Mortgage Inc. BK 10123