Smart Borrower Blog

Mortgage Rates Hold Steady, But Likely to Fall in 2020

Dec 28th, 2019 @ 7:20 PM by Amber Nelson

Although long-term mortgage interest rates were unchanged in the latest week, experts are predicting rates to fall to record lows in 2020.

The average rate on a 30-year fixed-rate mortgage slipped to 3.74% with 0.7 point in the week ended December 26, 2019, down from 3.75% the week before, according to data from Freddie Mac. The 15-year fixed-rate mortgage was unchanged at 3.19% with 0.7 point. The 5/1 adjustable-rate mortgage rose to 3.45% with 0.3 point from 3.37% last week.

Part of the interest rate holding pattern is due to a pause in rates by the Federal Reserve earlier this month. After three decreases in 2019, the Fed decided to leave its target rate in the range of 1.5% to 1.75% at their last meeting.

However, the year as a whole posted an average rate of 3.9% for the 30-year fixed-rate mortgage rate, the fourth lowest on record since Freddie Mac began tracking in 1971. And next year could see rates tumble even more.

Fannie Mae analysts have forecasted an average annual rate of 3.6% for 2020, which would be a new record low. That could provide a boost to the U.S. housing market.

“Heading into 2020, low mortgage rates and the improving economy will be the major drivers of the housing market with steady increases in home sales, construction and home prices,” said Freddie Mac chief economist Sam Khater said.

Yet, low rates may not actually make home buying more affordable. Lower rates often lead to higher home prices.

“While the outlook for the housing market is bright, worsening housing affordability is no longer a coastal phenomenon and is spreading to many interior markets and it is a threat to the continued recovery in housing and the economy,” Khater said.

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to and

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