Mortgage Rates Prediction: Are Big Changes Coming in November 2021?

Mortgage Rates Prediction

With COVID-19 cases rising and as supply chain and labor challenges continue to be an issue for the housing market, Americans may see mortgage rates trend upwards, experts are predicting. While, for now, there isn’t much change to mortgage rates, there are several factors that may come into play when asking the question, “Will mortgage rates rise?” — the publishing of the U.S. Department of Labor September employment report and the debt ceiling facing Congress.

Best Mortgage Rates

Currently, APR rates sit between a little over 2% and 3%; however, Americans may soon — perhaps starting in November — have to say goodbye to those low rates as inflation starts to take its toll.

APR rates graph

Mortgage Rates Forecast for November 2021

On November 3, the Federal Reserve may make a decision on how to proceed with its purchases of mortgage-backed securities (MBS). The Federal Reserve does not typically set mortgage rates. However, it’s been an influential force in keeping those rates low recently by spending $40 billion each month on MBSs.

As COVID-19 cases continue to serve as a challenge to economic recovery, inflation is starting to increase with it and “largely reflecting transitory factors”, according to a statement from the Federal Reserve’s September 22, 2021 meeting. However, the Federal Reserve also noted that vaccinations and economic policies have led to more economic activity and employment.

“If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted,” the Federal Reserve announced at the meeting.

For now, since the Federal Reserve is continuing these efforts in purchasing MBSs, Americans probably won’t see much fluctuation in mortgage rates. However, if the economy continues to show growth, the Federal Reserve may back off buying MBSs, experts are saying. Some economic experts suspect that the Federal Reserve may even announce a plan to taper off at its next meeting, November 3. As a result, borrowers may ultimately see mortgage rates slowly climb starting in November.

Mortgage Rate Predictions for the rest of 2021

According to Freddie Mac’s quarterly forecast, Americans may see 2021 close out with 30-year-fixed mortgage rates around 3.4%. This prediction on rising mortgage rates is reliant on multiple factors. These events may cause Americans to see changes to mortgage rates throughout the remainder of 2021:

  • Mortgage rates may be impacted by the Department of Labor’s September employment situation report, set to be released October 8. The August 2021 employment situation was, in t