Future Of Mortgage Rates
For those who have been thinking of buying themselves a home, you may have noticed the volatility in the mortgage market. This year has been historical in terms of what the mortgage market has done. With a record increase in a record amount of time, it is easy to see why the market is starting to slow down. But one might ask themselves, what is the future of mortgage rates going to look like? Well, experts way in and are predicting what they think will be the future of mortgage rates.
Buying With Higher Rates
Thinking about homeownership and actually achieving that goal is a big life step. Some people were unfortunately priced out of the market this year. However, for those who have decided that now is the best time to move, there could be some positive information for you. Below, we will discuss the expert predictions on the future of mortgage rates coming into the new year.
With mortgage rates continuing to fluctuate throughout the entirety of 2022, it is important to understand why. Because of rampant inflation and an aggressive and restrictive monetary policy being implemented, we have seen the interest rates across all asset markets remain volatile. Pressures based off economic uncertainty and unpredictability has been what led to a historical increase in the mortgage rate market. According to the latest projections, mortgage rates are expected to hover around the range they have been in for the past 2 months.
Future Of Mortgage Rates From Experts
We have seen a slight dip in mortgage rates since the June highs, but this does not mean mortgage rates will continue to decrease. Experts expect the future of mortgage rates to stay around the current levels, around the high 4% to low 5% range. As of now, it is likely we will see rates above 5%, however, coming into 2023, we may see the 4% rates return.
This could potentially bring some buyers in the current market some relief. This year, mortgage rates have skyrocketed from the 3% level to the 5% level. This is largely due to the Federal Reserves shift in policy, from accommodative to restrictive, at the fastest rate in decades. The shift in policy has led to a drastic increase in borrowing costs, which should help with inflation and home price appreciation in the short and long run.
Some Relief For Buyers?
Most buyers have seen mortgage rates level out and see it as a final chance to get in before another increase. A few potential buyers have taken a backseat in the market, and are trying to wait out the price increases and borrowing cost increases. However, this might not be the smartest idea because no one truly knows just how much more tightening the Federal Reserve will do. If they become more aggressive, we could see mortgage rates head back towards 6% again.
However, luckily for most buyers, experts expect a stabilization in the mortgage rates market. This might lead to a more neutral market, where both buyers and sellers have to work equally towards a closing. For buyers, lower and stabilizing mortgage rates can lead to new opportunity and ability to buy. If mortgage rates can stay around this level, or even head lower, sellers could see some more demand from buyers coming into the new year. The seasonality of real estate will start playing a factor here soon, so maybe buyers will once again have more favorable rates.