After nearly doubling in 2022, homebuyers can anticipate some relief as experts foresee a steady retreat in mortgage rates for the better part of 2023. Don’t hold your breath, though; the rates are far from the historic pandemic drop we saw; however, they’re still worth a squeeze. According to economists and realtors, homebuyers should expect mortgage rates to fall to about 5.5% by the end of the second quarter, as the first notably hovered around the lower 6%.
What Does This Mean For Housing Markets?
With the economy still stabilizing from the pandemic-induced tumble, one would expect real estate investors to be reluctant about dipping their toes back into the market. On the contrary, after witnessing mortgage rates scale up aggressively last year, the demand for housing has remained the same- this has left real estate developers and investors with a vast supply gap. The housing market is set to thrive in 2023 thanks to this broad-based homebuyers’ demand.
On the other hand, inflation makes it hard for real estate investors to borrow money; this consequently deters property development, putting a dent in the housing market. It’s all a matter of perspective.
What Does This Mean For Homeowners With Mortgage Debt?
There may be better times to list for mortgage holders looking to return their properties to the market. With mortgage rates steadily declining, experts advise waiting until the rates pick up to maximize your investment. Of course, this doesn’t apply to mortgages looking to dispose of their properties out of urgency- if this is where you’re at, listing your property mid-year when the rates are more buyer-friendly is your best bet.
Conversely, for the adjustable rate mortgage holders that want to hold on to their properties, 2023 is a great time to pay off your balances. According to Bankrate’s observation, mortgage rates have been stuck in the lower 6% for the last two months, and realtors predict they’ll hit 5% by June. Our advice- keep your eyes on mortgage trends and strike when the iron’s hot.
Which Way To Go For The Potential Homebuyer?
While the real estate market and the economy remain slightly discouraging for investment, things are looking up for homebuyers. After witnessing rates peak at 7% last year, the real estate market is finally loosening up, with mortgage rates playing between 6.125%-6.35%. Although some argue that the decrease is far from 2019’s impressive declines, this rate drop can save thousands of dollars off 30- and 15-year mortgages.
Bottom Line
As shifty and unpredictable as mortgage rates are, one thing is sure, fluctuations can be as beneficial as they can be detrimental with reference to 2019’s insane mortgage rate decreases where homebuyers and mortgage holders had the odds playing in their favor while home developers and sellers played at a disadvantage. While nothing is set regarding mortgage rates, having some insights on anticipated rates is critical. In this article, we’ve covered the expected mortgage rates trends to help you strategize your next move on the housing market; all you have to do now is keep a steady eye on rates and take your shot when the time is right.