Current mortgage rates are averaging 6.96% for a 30-year fixed-rate loan and 6.30% for a 15-year fixed-rate loan, according to Freddie Mac’s latest weekly rate survey. Will this go down?
Let’s hear what our experts have to say:
Molly Boesel, principal economist at CoreLogic
Highlights: Rates will stay near the current rate…..
“While the Federal Reserve paused on interest rate increases in June, they left the door open for more increases in the coming months as long as inflation remains above the desired rate. Therefore, we expect mortgage rates to stay near their current rate in July 2023 and trend lower as inflation pressures ease.”
Danielle Hale, chief economist at Realtor.com
Highlights: The better the inflation readings in the month, the more likely we’ll see mortgage rates drift lower.
“July should be an interesting month for mortgage rates. Although inflation has improved markedly — and is likely to continue to show improvement over the next few months — the Fed expects this improvement to be very gradual. As a result, their June projections showed that the typical FOMC member expects to make another two quarter-point rate hikes by the end of the year. Investors are currently pricing in a high probability of one more hike, but only a small chance of a second.
This gap between what the market expects and what the Fed will do will close over time. As a result of this, I think there is the possibility for some near-term upticks in mortgage rates, especially if we don’t see the expected improvement in inflation. This means mortgage rates could be near 7% again before beginning to ease. The better the inflation readings in the month, the more likely we’ll see mortgage rates drift lower.”
Mark Fleming, chief economist at First American
Highlights: This (rate) is the new normal.
“Given the Federal Reserve isn’t meeting until the end of July, and markets have already adjusted expectations for another increase at that time, I expect mortgage rates will remain roughly in the 6.5%-7% range where they are today. We are between Fed meetings, so the market has adjusted to the current level of monetary policy. As long as there are no big surprises in the economic data between now and then, this is the new normal.”
Ralph DiBugnara, president at Home Qualified
Highlights: Rates will stay mostly the same.
“I believe we will see fixed mortgage rates stay mostly the same or flat, settling at 6.5% for the 30-year and 5.875% on the 15-year. Rates seem to be trending down over the last few weeks based mostly on the Fed holding off on raising rates any further in June.
But with inflation still rising in Europe, we could see a reaction by our federal bank to raise rates again in July with fear of our economy continuing the same trend. With the anticipation of that, I don’t see any huge move until the Fed speaks and clarifies where they currently see the United States trending for the remainder of the year.”
Rick Sharga, president and CEO at CJ Patrick Company
Highlights: stay in that range (6.5%-7.0% ) for most of July.
“Mortgage rates have been stuck in a narrow band between 6.5%-7.0% for the past month or so, and it seems likely they’ll stay in that range for most of July, while the market waits to see if the Federal Reserve resumes hiking the Fed Funds rate after holding steady in its June meeting.
If we have good news on the inflation front and the Fed is able to hold off on rate hikes in its July meeting, we may finally see mortgage rates turn the corner and begin slowly declining. But until we see the economic data, it’s all speculation.”
Mortgage rate predictions for 2023 by 5 major housing authorities.
The 30-year fixed-rate mortgage averaged 6.96% as of July 13, according to Freddie Mac.
All five major housing authorities projected 2023’s third-quarter average to finish below 6.96%.
National Association of Realtors sits at the low end of the group, predicting the average 30-year fixed interest rate to settle at 6.1% for Q3. Meanwhile, the National Association of Home Builders and Wells Fargo have the highest forecasts of 6.48% and 6.6%, respectively.
After hitting the lowest interest rate record in 2020 and 2021, mortgage rates climbed to a 14-year high in 2022. Many experts and industry authorities are of the opinion that rates will follow a downward trajectory in 2023.
However, after considering historical data, it can be said that interest rates are still below historical averages.
Dating back to April 1971, the fixed 30-year interest rate averaged around 7.8%, according to Freddie Mac.
So don’t worry about rates, if buying a house needs your attention you can still get a good deal, historically speaking — especially if you’re a borrower with strong credit.
Just make sure you shop around to find the best lender and lowest rate for your unique situation.