12/20/2022: Will Mortgage Rates Go Down in 2023?
The mortgage rates have been on a steady rise in the year 2022 until there was a dip this November. As a result, financial institutions and specialists are trying to predict how the year 2023 will be. This volatility in the mortgage rates is primarily due to economic uncertainty, recession fear, and Federal Reserve’s steps to fight inflation.
A recent speech by Federal Reserve Chairman Jerome Powell suggested there would be smaller hikes in the interest rates starting in December. He cautioned that the monetary policies are likely to stay strict as inflation remains high. These statements make the experts believe that the rates will likely increase in the coming months until inflation is under control.
What Is Affecting the Mortgage Rates Now?
Despite remaining high, inflation rates are showing signs of improvement. After declining in the first half, the GDP increased to 2.6% in the third quarter. The unemployment rate is at just 3.5%, which matches the level before the pandemic. When combined with the Federal Reserve’s moderate interest rate increase, mortgage rates are taking a slow downturn.
Mortgage Rate Predictions
According to the Mortgage Bankers Association (MBA), mortgage rates are expected to come down in 2023. MBA is forecasting the mortgage rates to end 2023 at around 5.4%, though there might still be high volatility in the mortgage rates in the coming months as the Federal Reserve continues to increase the interest rates.
HSH.com mortgage website vice president Keith Gumbinger expects higher rates in early 2023, with the rates can turning downward later. He also predicted that the rates could range between 5.5%-6.75% the next year.
ATTOM executive vice president of market intelligence, Rick Sharga, expects the rates for 30-year mortgages to be somewhere between 5.5% to 6% by the end of 2023. The chief economist of the National Association of Realtors (NAR) also has a similar view on the situation, where he expects a better rate of 6% compared to the current 7%.
Is 2023 a Good Time to Buy a House?
Given the fluctuations in the mortgage rates in the coming year, it is hard to decide if 2023 will get you a good deal in terms of rates. Furthermore, if you find a house that meets your expectations and budget, experts advise not to delay the purchase, especially if you intend to live in it for at least a period of 5-10 years.
Try to keep a close watch on the mortgage rates, which will help you get a house at better rates. Understanding your credit score and improving your creditworthiness can put you in a strong place when purchasing a house. To quickly analyze your financial situation, you could use the interactive and informative financial calculators provided by the Security State Bank before seeking customized and accurate financial advice from professionals.
Mortgage rates are affected by various factors, and predictions vary widely. If you are looking for information regarding the current mortgage rates or any financial services, then contact the highly dedicated professionals at Security State Bank. We provide premier banking solutions with a customer-first approach. Contact us today for more information.