Each year, various finance industries, real estate professional associations, and government-backed organizations like Freddie Mac predict mortgage interest rate trends. These predictions sometimes differ, and there’s no guarantee that they will be accurate. However, February is the time of the year when these mortgage rate predictions tend to solidify, and different experts weigh in. Current forecasts on mortgage rates vary between 5% and 7% for 2023, depending on the expert source. When interest rates go down, the housing market tends to heat up, so if you’re in the market to buy a home or refinance in 2023, it’s a good idea to keep an eye on trends in mortgage rates.
Encouraging Mortgage Rate Forecasts
Some mortgage rate predictions show an encouraging trend of lower or steady mortgage interest rates for 2023.
First, Compass, Inc.’s Regional President Neda Navab predicts that mortgage rates are at or near their peak as of the beginning of 2023 and could be around 5% by the end of the year, thanks to the slowdown in inflation and lower U.S. Treasury bond yields that impact mortgage rates.
Another prediction from the Mortgage Bankers Association (MBA) says that “long-term rates have already peaked.” The MBA says that mortgage rates will end the year at a precise 5.2%. The MBA comprises of industry leaders, direct experts, and the leading power players originating the loans, making their predictions carry a lot of weight.
Less Optimistic Mortgage Rate Forecasts
Freddie Mac, one of the two government-sponsored home mortgage enterprises, and Fannie Mae predict that the average 30-year mortgage rate will be 6.6% at the beginning of 2023 and end the year at about 6.2%, an entire point higher than the Mortgage Banking Association.
An economist with Realtor.com, Jiayi Xu, predicts that ongoing inflation will keep mortgage rates in the 6% to 7% range in 2023.
The National Association of Realtors (NAR)’s senior economist Nadia Evangelou says that mortgage rates could end 2023 at slightly under 6% as long as inflation continues to slow down.
Adjustable rate mortgages (ARMS) offer lower interest rates than fixed-rate mortgages. Working with an experienced broker like California Platinum Realty and Loans can provide you with more choices in a mortgage that can fit your financial goals and objectives, along with delivering a home purchase loan or a refinance. Contact California Platinum Loans to discuss your options in home mortgages today.