Mortgage Rates Jump For Fourth Straight Week

Strong economic data and stubbornly high inflation pushed mortgage rates up for the fourth consecutive week, giving buyers whiplash after weeks of declines prior. The 30-year fixed-rate loan averaged 6.65% this week, according to Freddie Mac. Mortgage rates are about double what they were a year ago. Still, the latest housing data indicates market resilience and suggests activity will pick up in the coming months, says Nadia Evangelou, NAR senior economist. Rate relief could be on the horizon. If inflation eases faster than expected, mortgage rates could decrease to the low 6% range over the upcoming weeks, Evangelou says.

Economists And Real Estate Pros On What To Expect In The Housing Market This Spring

2022’s housing market saw higher prices and higher mortgage rates.  What’s in store for 2023?  Here are predictions from the pros:

1:  Unpredictable mortgage rates.  Its predicted that rates will fall this year, however February saw an increase.  NAR senior economist Nadia Evangelou, predicts: “With mortgage rates projected to stabilize below 6% in the second half of the year, more Americans will likely become homeowners, boosting the homeownership rate.”

2: Prices will remain relatively stable.  Many experts predict moving into the Spring market, home prices will stabilize.  As interest rates are still higher than last year, and inventory still low, home prices will likely remain stable, depending on which housing market.

3: More people will be looking to buy.  Spring always sees more housing activity as more buyers state looking and more sellers start listing.  This year will likely continue that trend.

4: Housing inventory will remain an issue.  Over the last few years, many homeowners have refinanced their mortgages at near 3% rates.  It will be unlikely that many of those will want to sell and purchase other homes at rates close to 7%, unless absolutely necessary.

5: Buyers will snap up second homes.  For affluent people, housing remains a stable investment and a hedge against inflation.  The luxury market is still strong, and there is enough wealth to support that market.  More buyers of means may consider buying a second home to use as an investment property. 

Should you buy a home in 2023 or 2024?

Lawrence Yun, chief economist at the National Association of Realtors, suggests that despite lower mortgage rates predicted for 2024, don’t expect them to bottom out to historic lows of the past few years.  He goes on to suggest that rates will not return to the 3% or 4% range.  And if rates do return to those levels, homeowners with higher rates will have the option to refinance.  A home price correction would mostly be short lived.  Inventory is mostly low, so buyer demand will likely keep prices stable.  Homebuyers shouldn’t focus too much on the short term fluctuations in home prices, as timing the market is verry difficult.  Buyers who plan to live in their homes for 5 or more years should be less concerned with short term market fluctuations.  Buying a house for one’s immediate needs should be a prime influence in the home buying decision.