Bank of America head of retail lending Matt Vernon.“I think it’s reasonable to assume that rates will come down a bit in the second half of the year and stabilize if the Fed takes its foot off the monetary-tightening pedal.” First American deputy chief economist Odeta Kushi.“orecasts that … mortgage rates will drop-with the 30-year fixed mortgage rate progressively falling to 6% this year and to 5.6% in 2024.” National Association of Realtors (NAR).“ith the rate of inflation decelerating, rates should gently decline over the course of 2023.” Freddie Mac chief economist Sam Khater.30-year fixed rate mortgage will average 6.6% for Q3 2023, according to the June Housing Forecast. e expect a gradual decline that could bring rates near 6% by year-end. Here’s how other experts predict market conditions will affect the 30-year, fixed-rate mortgage in the coming months: “But only if you have a property in mind that fits your budget.” Mortgage Rate Predictions for July 2023 “Be prepared to jump on a dip in rates,” says Robert Frick, corporate economist at Navy Federal Credit Union. So what’s the best strategy for prospective homebuyers in this uncertain economic climate? “There is no need to consider raising interest rates.” “The rate hikes from earlier months have yet to exert their force at a time when inflation has already decelerated to 4%,” said Lawrence Yun, chief economist at the National Association of Realtors. The Fed’s hawkish outlook has frustrated some housing experts. “Nor do I think it is at all likely to be appropriate.” “As anyone can see, not a single person on the committee wrote down a rate cut this year,” said Federal Reserve Chair Jerome Powell at a press conference following the committee’s announcement. “The market had previously priced in rate cuts by the end of 2023, so there will be an adjustment to these new expectations that could put some upward pressure on interest rates in the near term,” said Danielle Hale, chief economist at, in an emailed statement.Īs far as the July meeting and whether the Fed will pause again or raise rates, policymakers will continue to monitor the implications of the data regarding the economic outlook to determine the stance of their monetary policy, according to the statement.Īnd the possibility of rate cuts in 2023? The indirect impact of more rate hikes portends an increase to the 30-year fixed mortgage rate-which has been inching closer to 7% in recent weeks. The new projection implies two more rate hikes before the end of 2023 if the Fed proceeds with quarter-point increases. To determine monetary policy, the Fed considers “a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments,” according to a press statement. The Fed’s policy rate is currently in the 5% to 5.25% range. Though Fed policymakers skipped an 11th successive increase to the federal funds rate-the borrowing rate for commercial banks and credit unions-at their June meeting, officials revised the 2023 peak rate projection up to 5.6% from the 5.1% target projected in March. Rates for home loans remain caught in a tug-of-war between high inflation and the Federal Reserve’s actions to rein in inflation, which often indirectly pushes long-term mortgage rates higher. High Mortgage Rates Persist Amid Economic Uncertainty, Fed Policy Goals
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