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Mortgage Rates in 2019

January 24, 2019

The average rate for 30 year fixed mortgages dropped in recent weeks (Jan 2019) to 4.45%. Despite the often alarming reports that mortgage interest rates are going up, the worst claims are unjustified.

Here is an overview of what has happened to 30-year fixed-rate mortgages. This is based on an  average for lenders across the country, compiled every week by Freddie Mac, a corporation formed by Congress in 1970 to underwrite home mortgages.

  • In 2016, mortgage interest rates dropped to a record low of about 3.4%.
  • In 2017, rates rose rapidly to about 4%.
  • In 2018, rates again rose rapidly to about 4.5% and peaked in November close to 5%. 
  • In December 2018, rates began to drop from a peak of 4.94% and appear to be holding at 4.45%, a decrease of 8%. 

15-year fixed and 5-year adjustable rates are lower than 30-year fixed rate loans, both at about 3.9%.

Mortgage rates last 5 years

What you can expect for mortgage rates in 2019

Economists are predicting an increase in rates to about 5% by the end of 2019. Here is a summary of their predictions:

Quarter
2019
Freddie
Mac
Fannie
Mae
Mortgage
Bankers
Assoc
National
Assoc
Realtors
Average
Q14.94.84.84.74.80
Q25.04.84.94.84.88
Q35.24.85.04.94.98
Q45.34.85.05.05.03
The mortgage rate is coupled to many factors: the bond market, political climate, world economic conditions, bank profits, the Federal Reserve rate, and more. The predictions in this chart are probably the worst case; the present direction suggests that rates could be lower. However, there have been sudden, large increases in rates in the past: a 24% increase in November 2016 and a 16.5% increase in January 2018. 

What does a change in mortgage rate mean for you?

If you buy a Marin home for $1,350,000 (the median sale price for a single family home in 2018), with a 20% down payment, here are the payments for a mortgage of $1,080,000 at different interest rates:

Mortgage Interest RateMonthly Payment
3.5%$4,850
4.%$5,156
4.5%$5,472
5.0%$5,798
Each 0.5% in interest rate results in a change of about $300-$325 in your monthly payment for a loan of $1,080,000. 

Factors that affect your mortgage rate

There are many factors that can change your mortgage rate, including:

  • A loan less or equal to $726,525 is a conforming loan (for 2019). Conforming loans usually have lower interest rates than Jumbo loans, over $726,525.
  • Amount of down payment relative to the loan.
  • The borrower’s debt-to-income ratio. This is the percentage of your monthly income used for recurring payments, including the new mortgage, car loans, and so on. This should be 45% or lower.
  • The type of property.
  • The borrower’s credit score and history.
  • The lenght of the loan. It may be worth considering a shorter loan with a lower interest rate.

To navigate this complex process, we highly recommend that you consult a professional mortgage broker. We also recommend that you use a local mortgage broker with an established reputation in the community. This can give you the best deal and personal service. An established, local broker can also help you to buy a home when there are competitive offers; sellers and their real estate agents have higher confidence in closing the sale if the mortgage broker is known and respected. Contact Madeline for recommendations.

Filed Under: Home Buyers, Marin County Market Trends Tagged With: Belvedere, Condo, Corte Madera, Fairfax, Greenbrae, Kentfield, Larkspur, Madeline Schaider Real Estate, Mill Valley, Novato, Ross, San Anselmo, San Rafael, Sausalito, Single Family Home, Tiburon, Townhome, West Marin

Madeline Schaider

Madeline Schaider

Marin County Real Estate
(415) 515-9357 Mobile/Text
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5 Essential Tips for Home Buying That a Typical Realtor Might Overlook:

1. Trust Your Instincts: While data and market research are critical, don't undervalue your personal feelings about a home or neighborhood. Your comfort and gut feeling play a significant role in making a house a home.

2. Engage with the Community: Before buying, visit the local coffee shop, park, or community center. The firsthand experience will offer insights into the neighborhood vibe and its residents that online reviews can't capture.

3. Work with an Experienced Realtor: Buying or selling a home requires a board range of skills, from understanding legal issues to effective negotiating.  Partnering with an experienced realtor who truly knows the ins and outs of the industry can be invaluable.

4. Plan for the Unexpected: Whether it's future personal needs, market fluctuations, or unforeseen home repairs, always have a contingency plan or savings for unexpected events.

5. Evaluate the Morning and Night Ambiance: Visit the property at different times of the day. What might seem like a quiet street during your midday visit could be a noisy commute route by evening. The difference in atmosphere can significantly impact your living experience.

Madeline Schaider Real Estate
📲(415) 515-9357

#marinrealestate #marinrealtor #findyourdreamhome #bayarearealestate #movingtomarin #sfbayarea #californiarealestate #marincounty #livinginmarin
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Madeline Schaider Real Estate

(415) 515-9357 Mobile/Text
madeline@livinginmarin.com
CA DRE# 01082913
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