As we enter the month of December, the end of the year is quickly approaching. It is having home buyers raise many questions. Is 2023 the year to purchase a home or will interest rates continue to climb? Here’s some insight on what is to come in the year of 2023. So that you will have all of the information to make an informed decision on what is right for you and your family.
Mortage rates will continue to rise with inflation
The year of 2023 has been a very chaotic year for interest rates in the real estate market. The increases we saw happened very fast and dramatic. Interest rates have reached their peak in the last 20 years. It has really shaken up the market, leading buyers scattering to find a home they can afford. With a 30-year mortgage fixed rate around 7% in January 2023 and surpassing 11% in the fourth quarter of 2023. (See graph below):
When will mortgage rates go down?
Mortgage rates rose steadily in 2022 before taking a substantial dip in mid-November. Experts are still predicting overall higher rates next year, with near-term drops likely to be only temporary.
We polled eight industry insiders for their 2023 mortgage rate predictions and answers varied widely, from just 5% to over 9% for the 30-year fixed rate.
Experts tend to agree that continued high inflation will keep pushing mortgage rates up, while it would take a serious recession or an unexpected “black swan event” to push them much lower.