Sub Six Rates?

During the Summer of 2022, the federal reserve hiked mortgage interest rates in an attempt to curb inflation. And it worked, mostly. Mortgage rates shot up into the 9s in June, essentially tripling what they had been during 2021. This effectively stalled the housing market all throughout the fall and into 2023 even though rates dipped into the 7s. Demand is still out there, though, and it has people wondering what interest rates in 2023 might look like. 

Mortgage rates averaged 6.33% for 30-year fixed loans in the week ending Jan. 12, according to Freddie Mac. Meanwhile, Mortgage News Daily, which reports average rates for the day instead of a whole week, had them at 6.09% as of Monday, Jan 16. That’s quite a difference from when rates topped 7% back in November.

What This Means for 2023

Realtor.com Senior Economist George Ratiu thinks we’re headed in the right direction. He says, “If inflation continues to fall at the current pace, we could possibly see mortgage rates under 6% by the tail end of February.” 

This, coupled with median home prices falling to $400,000, and it looks like buyers might be getting a bit of a break from the intense prices of the last six months. 

“The decline in price from their summer peaks, combined with sliding mortgage rates, is lowering mortgage payments and boosting purchasing power for buyers,” says Ratiu. All of this seems to be happening just in time for the typical Spring selling surge. 

For help navigating these murky real estate waters, contact us today! We would love to assist you in finding your dream home.