The economy is a significant factor in mortgage rates and how easy it is for a potential buyer to get a loan for a home. Since so many things work together to influence the economy, predicting the future is like figuring out which person through a specific penny in a wishing well.
It’s just not that easy. The best way to make an educated guess is to look at the statistics and facts.
How Have the Rates Changed Since 2022?
The federal fund rate and the long-term mortgage rates rarely affect one another, but they tend to work together in the end. For the past year, both rates have continued to climb higher. Industry professionals predict that there will be another dramatic increase sometime around July. In the past, when this type of activity occurred, there was a slowdown throughout the housing market.
Potential for Higher Rates in the Future
Many consumers who keep a close watch on the stock market are afraid that mortgage rates will climb higher than expected. This could mean many things, including that people may need help to borrow what they need to get the property they want. The steep rise in rates over the last year makes people fearful that record-breaking higher rates are just over the horizon.
The Increase May Be Gradual
While consumers are waiting at the edge of their seats, industry professionals are preparing for a more gradual increase over a few years instead of a spike that occurs quickly. It all depends on where you stand in the scheme of things. You will undoubtedly find a few who side with the consumers and agree that rates will skyrocket. Most counter with the fact that, when that happens, the market will slow dramatically, and rates will begin to drop to more normal levels.
What Can Potentially Influence Mortgage Rates?
The federal funds rate is used to reduce the impact of inflation on long-term mortgage rates. Because federal funds rates are used for shorter-term loans, they can help to keep the rates for longer-term loans more in line with the economy. When inflation starts to get out of control, it can wreak havoc on all loan rates, making it impossible for people to borrow money without paying exorbitant rates.
2023 Mortgage Rate Predictions May Stay Steady
If you hope mortgage rate predictions will drop in 2023, this is not your year. From how it looks, renting your home instead of selling it may be the way to go, at least for the near future. Renting can be a significant pain, but you control whom you rent. There are many good candidates out there who will treat your property with the respect it deserves.
If you have questions or are overwhelmed by all the numbers and speculations regarding mortgage rates and your ability to buy a home. Contact the professionals at Fidelity Mortgage Lenders. We can provide honest, upfront answers you can rely on to help you make an informed decision. Schedule an appointment with us today to learn more.