In this article, we'll explore the latest predictions for mortgage rates over the next 90 days and what it means for those looking to buy or refinance a home. For prospective homebuyers and current homeowners, keeping a close eye on mortgage rates is crucial in determining when to make a move in the housing market.
In recent months, mortgage rates have been on the rise, reaching close to 7%. This upward trajectory is driven by various factors, including Federal Reserve interest rate hikes, regional bank turmoil, debt ceiling concerns, and mixed economic data. However, despite the current trend, there is still optimism among housing market watchers that mortgage rates may have peaked in the fall of the previous year and could potentially resume their steady decline.
This mortgage rate forecast relies on several key factors, including cooling inflation, a cautious approach by the Federal Reserve regarding rate hikes, and the resolution of the debt ceiling limit by Congress. As of the week ending July 27, the average 30-year, fixed-rate mortgage stood at 6.81% according to Freddie Mac.
Mortgage Rates Forecast for Next 90 Days
As the financial market experiences fluctuations in interest rates, potential homebuyers and homeowners are eager to know the forecast for the coming months. In this blog post, we will explore the recent mortgage rate trends and expert predictions to determine whether rates will go down in the next 90 days. Understanding these forecasts can help individuals make informed decisions about their mortgages and financial plans.
Will Rates Go Down in August?
Amidst the recent ups and downs in interest rates, the burning question remains: Will mortgage rates go down in August? To find out, we must first analyze the current market conditions and the factors influencing rate movements.
Expert Rate Predictions:
Various economists and experts in the mortgage industry have shared their predictions for the coming month. Let's take a closer look at their forecasts:
Ralph DiBugnara, President at Home Qualified:
Prediction: Rates will rise: Ralph predicts that 30-year and 15-year fixed mortgage rates will increase based on the perception that the Federal Reserve may raise rates at least two more times in 2033. He foresees rates settling at 6.99% for the 30-year and 6.25% for the 15-year.
Danielle Hale, Chief Economist at Realtor.com:
Prediction: Rates will fall: Danielle believes that given the improvements in inflation trends, mortgage rates are likely to drift lower in August. Progress on inflation could bolster the Fed's confidence in economic soft-landing, leading to lower rates.
Jess Kennedy, Co-founder, and COO at Beeline:
Prediction: Rates will fall: Jess suggests that despite an anticipated rate increase in late July, there is a possibility of seeing a drop in interest rates in August. The large spread between 10-year Treasury bonds and 30-year fixed mortgage rates creates room for potential rate decreases.
Odeta Kushi, Deputy Chief Economist at First American:
Prediction: Rates will moderate: Odeta expects mortgage rates to fluctuate within a narrow range in the next month. She points out that disinflation should support downward pressure on rates unless there are unexpected economic surprises.
Jessica Lautz, Deputy Chief Economist at National Association of Realtors:
Prediction: Rates will fall: Jessica believes that a positive reaction from the Fed to easing inflation could have a ripple effect on mortgage rates. This may lead to falling rates for homebuyers in the upcoming months.
Rick Sharga, President, and CEO at CJ Patrick Company:
Prediction: Rates will moderate: Rick foresees mortgage rates staying within the 6.5-7.0% range. Better-than-expected inflation numbers and softening job market conditions provide hope for a slow but steady decline in rates.
Mortgage Interest Rate Forecast for the Next 90 Days:
The Federal Reserve's actions to combat inflation in 2022 led to significant interest rate growth. As inflation cools down, the size of rate hikes is decreasing, and experts believe that rates will move within a tighter range compared to early 2022.
Current Mortgage Interest Rate Trends: As of July 27, 2023, the average 30-year fixed-rate mortgage was 6.81%. While rates hit a 14-year high in 2022, experts now project a downward trajectory for 2023, providing favorable conditions for potential borrowers.
Mortgage Rate Predictions for 2023: Housing authorities predict that the average 30-year fixed interest rate for Q3 2023 will settle below 6.81%. Projections range from 6.10% (National Association of Realtors) to 6.80% (Fannie Mae). Despite these variations, rates are expected to remain below historical averages.
The forecast for mortgage rates in August 2023 is mixed, with some experts predicting a rise, while others foresee a decline or moderation. Several factors, including inflation trends, economic indicators, and Federal Reserve actions, will influence rate movements. As always, interest rates are volatile and can change unexpectedly.
If you're considering buying a home or refinancing, staying informed about market developments and working with a trusted mortgage professional can help you make the best decision for your financial situation. Remember to shop around for the best rates and terms and be prepared to act quickly when you find a suitable mortgage offer.
The Forecast for Year End 2023
The National Association of Realtors (NAR) senior economist and director of forecasting, Nadia Evangelou, predicted that if inflation continues to slow down, mortgage rates may stabilize below 6% in 2023. The Mortgage Bankers Association (MBA) expects that 30-year mortgage rates will end in 2023 at 5.2%.
On the other hand, Freddie Mac forecasts that the average 30-year mortgage will start at 6.6% in Q1 2023 and end at 6.2% in Q4 2023. Therefore, housing market stakeholders are keeping a watchful eye on the data-dependent Fed for signals on whether policymakers will maintain or cut the benchmark rate or resume more aggressive tightening measures.
What's the best strategy for prospective homebuyers in this uncertain economic climate? “Be prepared to jump on a dip in rates,” says Robert Frick, the corporate economist at Navy Federal Credit Union. “But only if you have a property in mind that fits your budget.”
According to Compass U.S. region president, Neda Navab, there have been signals that mortgage interest rates may be at or near their peak, given recent encouraging news around inflation and a corresponding drop in the U.S. Treasury yields that help set mortgage rates.
A sustained drop could push mortgage rates into the 5% range late in the second quarter or in the second half of 2023, but that's definitely not guaranteed. Mortgage rates are likely to move in the 6% to 7% range over the next few weeks, which continues to pose a significant challenge to affordability, according to Realtor.com economist, Jiayi Xu.
The fight over raising the debt ceiling is likely to drag into the summer, and mortgage borrowers should expect rate volatility as a result, warns Zillow Home Loans senior macroeconomist, Orphe Divounguy. This rate volatility could mean that prospective homebuyers should not wait for mortgage rates to decrease further, as they may start increasing again soon.
To sum up, it is anticipated that the mortgage rates in the upcoming 90 days will fluctuate, with marginal rises or drops contingent upon the Federal Reserve's efforts to curb inflation. Those intending to buy or refinance a home should remain alert for any favorable changes in the rates, provided they have a property in sight that meets their financial plan. Additionally, they should keep a close tab on the data-based actions of the Fed to gauge whether they will retain or diminish the benchmark rate or adopt more forceful measures to tighten the market.
Home loan rates are being influenced by high inflation and the Federal Reserve's actions to restrain it, leading to fluctuating rates. The best strategy for prospective homebuyers is to be prepared to jump on a dip in rates, but only if they have a property in mind that fits their budget. Experts predict that mortgage rates may stabilize below 6% in 2023, but Freddie Mac forecasts rates to end at 6.2%.
With the fight over raising the debt ceiling likely to drag into the summer, borrowers should expect rate volatility. Prospective homebuyers should remain vigilant for any favorable changes in the rates but shouldn't wait for rates to decrease further, as they may start increasing again soon.
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