First things first: Chill out. Mortgage rates have been higher – much higher.
Yes, mortgage rates climbed at the end of 2016 to their highest level since 2014. But don't slam the door on buying a house just yet. Experts say there's no reason to panic.
Estimates for mortgage rates in 2017 will range from as low as 3.75% to as high as 4.6%. According to a report from Bankrate.com , here is how experts see mortgage rates this year:
- The Mortgage Bankers Association predicts that the 30-year fixed rate mortgage will average 4.3% in the first quarter of 2017.
- Fannie Mae (the common name for the Federal National Mortgage Association) and the National Association of Realtors predict it will average 4.1%.
- Freddie Mac (the common name for the Federal Home Loan Mortgage Corporation) forecasts an average mortgage rate of 4.2% for all of 2017.
Some experts attribute the initial rise in mortgage rates last November to the U.S. Presidential election and the prospect of a new administration's housing policies.
"In view of realized and expected labor market conditions and inflation, the committee decided to raise the target range," Fed Chair Janet Yellen said at a news conference last December. "Our decision to raise rates should certainly be understood as reflecting the confidence we have in the progress the economy has made and our judgement that will continue."
Yellen also announced there may be gradual interest hikes in the coming years. Current forecasts predict 2017 will experience three "bumps" in mortgage rates.
"I don't think anyone welcomes higher interest rates, but it should not be a considerable deterrent to someone who really wants to buy a home," says Keith Gumbinger, Vice President of HSH.com. .
"Rates are still comparatively low, and it's a good time to buy a home," said Kelley Harwood, Vice President, Mortgage, at First National Bank. "We expect to see a lot of home-buying activity in the early months of 2017, so if you're considering buying a home this year, you should start the process and meet with a mortgage specialist."
"We know that purchasing a home is one of the biggest financial decisions in your lifetime, which is why it's important for us to be with customers throughout the entire process – we handle all the tedious details so they can focus on bigger things that matter to them most. Ultimately, our customers are able to make a more informed decision."
It's all about perspective
Even if mortgage rates reach the high end of the estimates, they will still be low by historic standards. It's all about perspective, and with that in mind, here are three reasons not to freak out about mortgage loan rates going up:
- Rates have been higher – much higher – According to com – which has surveyed mortgage rates weekly since September 1985 when the 30-year fixed rate was 12.31% – the rate was as high as 18% in the early 1980s before Bankrate.com started its surveys. 
- The housing market is still healthy and growing – Despite the rise in rates, the outlook for the housing market remains good. According to the National Association of Realtors, existing home sales were projected to reach 5.42 million for 2016 when totals come in, 3.3% higher than 2015, and the best year since 2006. In 2017, sales are forecast to grow an additional 2%, to 5.52 million. 
- The GDP is expected to rise by only about 2% – Danielle Hale, Managing Director of Housing Research at the National Association of Realtors (NAR), said expected gross domestic product growth in the future is still lower than what we've seen since the end of World War II, so she predicts rates won't rise too dramatically. 
Yes, rates are predicted to climb steadily this year, with three more bumps from the Fed as the economy grows. But again, most experts – including Hale from the NAR – don't see the rate going over 4.6% by the fourth quarter of 2017.