As the 2015-year is winding down, you’re starting to see a number of predictions for what 2016 will bring. Some of those predictions for the real estate market (both nationally and locally) are that home prices and mortgage rates are expected to rise in 2016. Not too long ago there was a blog called The Mortgage Outlook for Pittsburgh in 2015. In that blog we indicated that the following statistics would happen throughout the year of 2015:
- June 30-yr fixed mortgage rate was up about 4.15%
- July 30-yr fixed mortgage rate was up about 4.08%
- August 30-yr fixed mortgage rate was only up about 4.5%
- 15-yr. fixed rate increased 3.23%
- Average 5/1 adjustable-rate mortgage increased 1 base point to 3.24%
- Mortgage applications overall decreased 6.2%
Let’s see what the current Pennsylvania mortgage real estate statistics for some of these rates are according to a different source:
- 30 Year Fixed Mortgage rate – 3.77%
- 15-Year Fixed Mortgage rate – 2.91%
- 5/1 Adjustable Rate Mortgage – 2.97%
The national rate for a 30-year fixed mortgage 3.75%. So while these statistics indicate that the mortgage rates have decreased over the course of 2015, which is not predicted to be the case for 2015. Also remember that the statistics above are for Pennsylvania as a whole while the stats from the old blog are for the greater Pittsburgh area. It’s also important to remember that mortgage rates are typically determined by the home’s price and the interest rate. The months of the previous blog (June-July-August) are typically the busiest months for real estate in the Pittsburgh region. So more sales typically means higher home prices which therefore means higher mortgage rates. While my previous blog indicates that home sales for this month and the past few months have remained consistent, they are lower than that of the peak real estate months of the summer.
National 2016 Mortgage Predictions
So how much will mortgage rates and home prices increase in 2016? Another source states that CoreLogic predicts a 5.2% increase in home values over the entire nation in the next year. They even gave a detailed map to predict the increase state-by state and Pennsylvania is predicted to get a 5.2% increase while most of the northeast and Midwest are in the 4% range. The west coast is expected to get the highest mortgage rate increase in the 5-10% range. West Virginia is expected to get the lowest increase with a 1.3% increase.
The chart below, from our source, gives the 2016 mortgage rate predictions for Fannie Mae, Freddie Mac, MBA, NAR and an average of all four.
With these mortgage statistics and predictions combined with the following two blogs, should help you realize that NOW is the perfect time to list your home!
After all, if you’re looking for a fresh start in 2016 as most people are, why not make it in a completely new home! We hope to see you in the real estate market soon and that you have a very happy end to 2015!
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Until Next Time,