October 25, 2022 | Sexton Real Estate Group
Mortgage rates are always a hot topic. Home buyers and sellers alike want to know where rates are headed, and whether it’s the right time to buy or sell a home. In this blog post, we will discuss seven critical facts about mortgage rates in 2023. By understanding these facts, you can make more informed decisions about your finances and real estate. Let’s get started!
1. Mortgage Rates Are Expected To Rise In 2023.
This is one of the most important facts about mortgage rates in 2023. Rates are expected to increase throughout the year, reaching an average of 5.5% by the end of 2023. This means that if you’re thinking about buying a home, it’s best to do so sooner rather than later.
2. The Rise In Mortgage Rates Will Be Driven By Inflation.
Inflation is one of the main drivers of mortgage rates. As prices for goods and services increase, so do interest rates. This is because lenders want to ensure that they are compensated for the increased cost of borrowing money.
3. The Fed Is Expected To Begin Tapering In 2023.
Another important factor that will affect mortgage rates is the Fed’s tapering program. This is when the Fed begins to reduce its asset purchases, which have kept interest rates low for many years. As the Fed begins to taper, interest rates are expected to rise.
4. Mortgage Rates Are Still Historically Low.
Despite the expected rise in rates, they will still be relatively low by historical standards. In the early 1980s, for example, mortgage rates averaged around 18%. So even with an increase to 5.5%, rates will still be very attractive by comparison.
5. You Can Still Find Low Rates If You Shop Around.
Not all lenders charge the same interest rate. Some may be more aggressive than others in raising rates, so it pays to shop around. You can use an online mortgage rate tool to compare rates from multiple lenders.
6. There Are Ways To Offset The Impact Of Rising Rates.
If you’re concerned about how rising rates will affect your monthly budget, there are a few things you can do. One option is to choose a shorter loan term. This will lower your monthly payments, although you’ll pay more in interest over the life of the loan. Another option is to make a larger down payment. This will reduce the amount of interest you’ll pay over the life of the loan.
7. Rising Rates Could Mean More Opportunities For Refinancing.
If you have a good credit score, rising rates could actually present an opportunity to refinance your mortgage. A higher interest rate will increase your monthly payment, but it will also lower your loan balance. This could lead to significant savings over the life of the loan.
What Are The Other Important Facts About Mortgage Rates In 2023?
There are many other factors that will affect mortgage rates in 2023. These include the state of the economy, the housing market, and changes in government policy. If you’re thinking about buying a home or refinancing your mortgage, it’s important to stay up-to-date on all of the latest developments. You can do this by following a trusted source of mortgage news and information.
State Of The Economy
The state of the economy is one of the most important factors that will affect mortgage rates. If the economy is strong, employers will be more likely to offer raises and bonuses. This will lead to more disposable income, which will increase demand for housing. As a result, mortgage rates are likely to rise.
On the other hand, if the economy weakens, employers may begin to lay off workers. This will reduce demand for housing and cause mortgage rates to fall.
The Housing Market
The housing market is another important factor that will affect mortgage rates. If there is strong demand for housing, prices will rise. This will lead to higher mortgage rates. On the other hand, if there is weak demand for housing, prices will fall and mortgage rates will decline.
Changes In Government Policy
Government policy can also have a direct impact on mortgage rates. For example, if the government lowers interest rates, this will make borrowing cheaper and lead to higher demand for housing. As a result, mortgage rates are likely to rise.
On the other hand, if the government raises taxes or imposes new regulations on the housing market, this will make buying a home more expensive and reduce demand for housing. As a result, mortgage rates are likely to fall.
These are seven critical facts about mortgage rates in 2023. By understanding these facts, you can make more informed decisions about your finances and real estate. If you have any questions, please don’t hesitate to contact us. We would be happy to help!
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