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I am the author of this blog and also a top-producing Loan Officer and CEO of InstaMortgage Inc, the fastest-growing mortgage company in America. All the advice is based on my experience of helping thousands of homebuyers and homeowners. We are a mortgage company and will help you with all your mortgage needs. Unlike lead generation websites, we do not sell your information to multiple lenders or third-party companies.

Will the mortgage rates go down, go up, or remain the same in 2023? Every potential homebuyer probably wants to know the answer to this question.

Current Mortgage Rates

The latest primary mortgage market survey (PMMS), released by Freddie Mac, showed that mortgage rates went up and 30 Year Fixed mortgage rates averaged 6.12%. The 15 Year Fixed mortgage rates averaged 5.25%. Note that these rates are for conforming mortgages with loan amount limits of $726,200. High Balance loans (loan amounts higher than base conforming limits) typically have higher interest rates.

Weekly Average Mortgage Rates

What is keeping the mortgage rates high?

Understand that Fed increasing the funds rate does not directly impact mortgage rates. They have more of a direct impact on the borrowings of other debts like Auto Loans, Personal loans, Busines Loans, and Home Equity Lines of Credit (HELOC). While mortgage rates have climbed down significantly from about 4 months back when they moved over 7%, the latest uptick in rates was caused by a blockbuster employment report.

According to the Bureau of Labor Statistics, the latest employment report released in early February shows the country added non-farm payroll by 517,000. The unemployment rate of 3.4% remains one of the lowest in the last 50 years. Strong employment news indicated that inflation might continue to remain elevated, a data point that keeps mortgage rates high.

2023 Mortgage Rate Forecast

The four leading agencies/associations – Fannie Mae, Freddie Mac, Mortgage Bankers Association (MBA), and National Association of Realtors (NAR), are all forecasting that mortgage rates will go down in 2023. However, how much they will go down varies widely between these four organizations. I believe MBA would end up closest to the actual numbers. Their Q1 2023 mortgage rate forecast of 6.2% already seems to be right on the money as evidenced by the latest Freddie Mac report.

2023 Mortgage Rate Forecast

Will the Mortgage Rates go down in 2023?

Predicting mortgage rates is fraught with uncertainties since multiple factors may impact the economy, employment, and inflation – all of which sway mortgage rates on a day-to-day basis. It is nearly impossible to know all things that can happen in the US and the world that can have an impact on mortgage rates. However, one statistic that has been more important for mortgage rates than anything else in the last year or so is inflation. So before asking “will the mortgage rates go down in 2023”, ask “will the inflation go down in 2023”?

If the answer to the latter is yes, you can be assured that the answer to the former will also be yes.  Inflation has been trending lower in the last 3 reports and other than expected volatility during some months, it should overall trend lower in 2023, in my opinion. And thus, (in my opinion), mortgage rates will go down in 2023.

Latest Inflation Report

Should I buy a Home now?

When mortgage rates go up, they invariably go down. We have seen that trend for the last 50+ years. So, as long as you can afford to buy a home, the current interest rates shouldn’t worry you too much. It should eventually go down and you can refinance to a lower rate then. But the current real estate market slow-down offers a once-in-a-decade opportunity to be able to negotiate certain terms with the sellers. You don’t need to go over the asking price in most cases, may able to keep your contingencies, and may even be able to ask for seller credits to buy down your rate and/or pay for your closing costs.

But, in a volatile market, it’s important to understand the mechanics of locking your interest rate that I covered in an earlier blog here.

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