Waiting for 3% Mortgage Rates?

It was last year, the Federal Reserve took action to try to bring down inflation. Mortgage rates rose rapidly from record lows in 2021, peaking above 7% in October. Bullish buyers were hit in their purchasing power, and some decided to press pause on their plans.

Currently, inflation is starting to drop, and mortgage rates have dropped below last year’s peak.

Sam Khater, Chief Economist at Freddie Mac:

“While mortgage market activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023.”

Great news if you’re planning to jump into the housing market. A drop in mortgage rates helps boost your buying power by lowering your monthly mortgage payment. This means the lower mortgage rates forecast could be just what you need to reignite your homebuying goals.

While this is an opportunity for everyone, don’t expect the rates to drop back down to the record lows we saw in 2021. Most experts agree that’s not the range buyers should bank on.

Greg McBride, Chief Financial Analyst at Bankrate,

“I think we could be surprised at how much mortgage rates pull back this year. But we’re not going back to 3 percent anytime soon, because inflation is not going back to 2 percent anytime soon.”

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