Mortgage Rates Will Come Down, It’s Just a Matter of Time
This past year, rising mortgage rates have slowed the red-hot housing market. Over the past nine months, we’ve seen fewer homes sold than the previous month as home price growth has slowed. All of this is due to the fact that the average 30-year fixed mortgage rate has doubled this year, severely limiting home-buying power for consumers. And, this month, the average rate for financing a home briefly rose over 7% before coming back down into the high 6% range. But we’re starting to see a hint of what mortgage interest rates could look like next year.
As long as inflation is high, we’ll see higher mortgage rates. Over the past couple of weeks, we’ve seen indications that inflation may be cooling, giving us a glimpse into what may happen in the future. The mortgage market is eagerly awaiting positive news on inflation. As Ali Wolf, Chief Economist at Zonda, says:
“The housing market is expected to face continued uncertainty heading into 2023 as consumers, financial markets, and policymakers work through their respective challenges in today’s economy. . . . we are watching for any additional stability in the MBS market, signs of cooling inflation, and/or less aggressive Federal Reserve action to give us confidence that mortgage rates are past their peak.”
As we get through the inflation battle and start to see that coming down, we should expect mortgage rates to follow. We’ve seen nods of this over the past couple of weeks. As the Federal Reserve works to bring inflation down, mortgage rates will come down as well. Bill McBride from Calculated Risk says:
“My current view is inflation will ease quicker than the Fed currently expects.”
As we look toward next year, we certainly hope he’s right.
Mortgage rates will come down – it’s just a matter of time. The hope is we continue to see more positive news on inflation, and that’ll bring mortgage rates down. This will give prospective homebuyers more buying power and lead to more homeowners throughout the country.
Stay up to date on the latest real estate trends.
When you're ready to sell your home, doing a little preparation beforehand can potentially help your home sell quicker and for a higher price.
The median single-family home and condo prices rose meaningfully from December 2023 to February 2024, up 14.1% and 17.9%, respectively. Year-over-year prices also appr… Read more
Mortgage rates increased in February, but their strong effect on the market may be waning.
Over the past few months, experts have revised their 2024 home price forecasts based on the latest data and market signals, and they’re even more confident prices will… Read more
The median single-family home and condo prices rose meaningfully from December 2023 to January 2024, up 12.9% and 7.3%, respectively. Year-over-year prices also apprec… Read more
Mortgage rates were remarkably stable in January, and near-term Fed rate cuts look less likely.
Homes are selling faster than the norm for this time of year – and your house may sell quickly too. That’s because more people are looking to buy now that mortgage rat… Read more
Homeownership is a major part of the American Dream. But, the path to achieving this dream can be quite difficult. While progress has been made to improve fair housing… Read more
Over the past year, one factor that’s really limited the options for your move is how few homes were on the market. That’s because many homeowners chose to delay their… Read more
You’ve got questions and we can’t wait to answer them.