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December 4, 2016 | Mortgage Rates Climb to 4.08% in December 2016 And Now Sit at a 12-Month High

Robert Campbell

Robert Campbell is a real estate analyst and economist. He's been publishing The Campbell Real Estate Timing Letter since 2002. His book (Timing the Real Estate Market) presents a clearly defined method for predicting the peaks and valleys of real estate cycles.

As my Timing Letter subscribers know, I have been showing evidence and warning of a possible long-term trend reversal in interest rates (to the upside) since mid-2016.

Recent developments in the 30-year mortgage market seem support that outlook,  as shown in the chart below.

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According to the latest Freddie Mac, the 30-year fixed-rate mortgage averaged 4.08% for the week ending Dec. 1, 2016.

This is up from a year ago at this time when the 30-year rate averaged 3.93%.

While my real estate timing model indicates that housing prices are still likely to trend higher for most major U.S. cities for at least the next 3-6 months, it will of course be interesting to watch is how the housing markets respond to these higher rates.

Will mortgage loans become easier to obtain if rates continue to rise — or will demand (and thus housing prices) start to fall?

Will we see an initial rush to buy homes before rates move even higher?

Will rising rates be offset by rising incomes and improving economic with Donald Trump as our next president?

While interest rates are only one of the five key Vital Sign indicators I use to signal which way U.S. housing prices are likely to move in the coming months and years, I will continue to rely 100% on incoming Vital Sign data to tell me how the 2017 housing market is likely to unfold.

To purchase the latest issue of The Campbell Real Estate Timing Letter, Click HERE.

To read a sample issue,  Click HERE.

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