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2020-01-09 14:27:25
What will 2020 Bring for Borrowers?
What Will 2020 Bring for Borrowers?

2019 was the best year for mortgage rates since 2011, but what will the new year bring for the mortgage industry?

As we’ve seen throughout the second half of last year, fixed mortgage rates averaged less than 4%. Most economists speculate that rates will remain just south of the 4% mark for the remainder of the year, however, several factors could impact how long today’s low rates will last.

Firstly, the latest crisis with Iran could serve as a catalyst for a in 2020 as instability among foreign relations typically drives down long-term interest rates. Secondly, during election years, the Fed is typically reluctant to make any major moves and choose to remain on the sidelines as it relates to hikes or cuts. As long as rates hold steady, consumers are likely to begin the highly anticipated spring buying season earlier.

However, even if rates tick north of 4% as this monumental year unfolds, it’s still extremely attractive when compared to nearly 4.5% rates in early 2019. Despite somewhat low inventory, 2020 will remain an opportune year for first-time buyers, especially considering the positive combination of low rates, newly expanded loan limits, and numerous low down payment options available.

2020 Loan Limits Increases
2020 Conforming Loan Limits: Increased to $510,400 from $484,350

More borrowers will qualify for loans as a result of the recent increase in loan limits. The Federal Housing Finance Agency (FHFA) has announced the increase of the 2020 conforming loan limits for Fannie Mae and Freddie Mac. In most parts of the country, the 2020 loan limit for one-unit properties will increase to $510,400 from $484,350. This will provide more buying power to homebuyers across the nation. High-cost area loan limits are also increasing.

2020 Loan Limits Table

Check out FHFA’s full list of the new loan limits for each county nationwide.

2020 FHA Loan Limits:  Increased to $331,760 from $314,827
2020 HECM Reverse Mortgage Loan Limits:  Increased to $765,600 from $726,525
Mortgage Rates Lowest in a Month

Mortgage rates have been edging lower for nearly 2 weeks and are now at their lowest in exactly 1 month. 30-year fixed mortgage rate averaged 3.72% for the week ending January 2, down two basis points from the prior week. By contrast, mortgage rates stood at 4.45% a year ago. 15-year fixed rates ped by three basis point to 3.19%.

If you or your clients are in the market for a purchase or refinance, now may be a favorable time to apply and save on interest over time. Don’t forget to ask me about loanDepot’s mello smartloan™ and how you or your clients will enjoy a faster, more secure, stress-free mortgage process.

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