Where are mortgage rates headed next?

Amid the COVID-19 pandemic, one silver lining for Americans interested in buying a new home has been record-low interest rates on mortgages. But how long will they stay so low?

Recently, rates crept above 3 percent for the first time since last July. And as the economy continues to recover from the effects of the pandemic, that upward trend could continue. However, a handful of financial experts told NextAdvisor (article below) that they don’t expect rates to suddenly skyrocket. Instead, the near-term future is likely to include some moderate gains, but with figures still below historical norms.

For a better idea of what those historical numbers look like, here’s a useful table from Freddie Mac that looks at rates month-by-month over the past 30 years. Back in 2019, before the onset of the pandemic, rates averaged 3.94 percent for the year. In 2018, they were at 4.54 percent.

Robert Deitz, chief economist for the National Association of Home Builders, told NextAdvisor that he expects rates to stay below 4 percent for the next two years. That would make the next two years more advantageous to buyers than the 2018-2019 window. And this will likely mean that demand for new homes will remain high, though a supply shortage could continue to push prices up, which makes affordability a concern.