RTC Mortgage Blog

Rate Forecasts: Unpredictable

May 26th, 2016 12:29 PM by Richard T. Cirelli

Everybody is talking about the Fed’s next move and what that means for rates for the rest of this year and beyond. I guess I can’t help but talk about it too.

The problem is that nobody knows and it seems even harder than ever right now to predict the outcome. Not even the heads of the Government enterprises Fannie Mae and Freddie Mac agree. And their predictions don’t match the chief economist of the Mortgage Bankers Association either.

First, let’s take a look at their forecast, announced just last week at a national conference in New York:

·         Fannie Mae forecasts a flat to slightly declining rate environment for the next 2 years with rates hovering around 3.7% for the standard 30-year fixed rate mortgage with loan amounts up to the national limit of $417,000.

·         Freddie Mac believes rates will rise to about 4.08%

·         The MBA predicts an average rate of 3.95%.

Granted, it’s not a huge difference between the low and the high predictions and rates have remained in a very low historical range for over 8 years now. But small differences and borrower perceptions make a big difference in the volume of home sales and mortgage applications.

And there are factors beside the Fed Reserve that are influencing the markets now such as; the rate of economic growth, the Presidential election, housing inventory, and more.

Rates today according to the weekly Freddie Mac rate survey are at 3.64% with an average cost of .5 points.

NBC Nightly News Spotlights Reverse Mortgages

I’ve been originating Reverse Mortgages for many years but the growth in this product has increased dramatically this year. That’s because various news outlets have reported on reverse mortgages and the program changes that have now made these loan products safer and more effective retirement planning tools. Perhaps none, however, have given reverse mortgages such an enormous viewership platform as a recent NBC Nightly News segment that aired this month.

Click Here to see the news clip:


Highlights of the report:

  • More than half of people over age 55 have little or no retirement savings,
  • While controversial in the past, consumer advocates now say these loans could be a “smart way to bring in more money.”
  • Thanks to new government regulations, reverse mortgages are now actually harder to get, and with tougher lending standards in place, they’re actually becoming less controversial and more popular

Having originated Reverse Mortgages for over 10 years, I agree that it is a much more desirable product. In fact, many of my clients have utilized the Line of Credit feature which requires no initial draw and grows in value over time.

I now have a Jumbo Reverse Mortgage Product too that allows loan amounts as high as $3,000,000

If you think you or someone you know might benefit from a Reverse Mortgage feel free to call me for a free consultation and presentation. 

Posted in:General
Posted by Richard T. Cirelli on May 26th, 2016 12:29 PM



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