Mortgage rates have a significant impact on the real estate market, affecting both buyers and sellers. In recent times, the COVID-19 pandemic and inflation concerns have contributed to fluctuations in mortgage rates. Therefore, understanding mortgage rate trends and predictions is essential for making informed financial decisions. In this blog post will analyze mortgage rate predictions for next week and what it means for buyers and sellers.
What Are the Mortgage Rate Predictions for Next Week?
According to Bankrate’s weekly poll of mortgage experts, 50 percent of respondents believe that rates will go down in the coming week (March 30-April 5). In contrast, 25 percent predict that rates will go up, and 25 percent think that rates will remain the same. However, experts caution that inflation concerns may contribute to higher rates in the long term.
Greg McBride, CFA, chief financial analyst at Bankrate.com, predicts that mortgage rates will go up in the short term due to calmness in the banking sector, leading to higher bond yields. Derek Egeberg, a certified mortgage planning specialist and branch manager at Academy Mortgage, agrees that inflation concerns may contribute to higher rates. He advises that rates will continue to drift higher until inflation is back under 5 percent, which is double the Fed target.
On the other hand, Les Parker, CMB, managing director at Transformational Mortgage Solutions, predicts that mortgage rates will go down due to the anticipated economic slowdown and financial instability, which will lend support to lower rates. Ken H. Johnson, a real estate economist at Florida Atlantic University, also predicts that mortgage rates will go down, citing the 10-year Treasury yield, which has been mostly trending downward since the beginning of March.
Dan Green, CEO at Homebuyer.com, predicts that mortgage rates will go down as the economy settles in for spring and inflation cools down, making it a good time for America’s home buyers. However, Jeff Lazerson, president of MortgageGrader, predicts that rates will remain unchanged, citing the interest rate whipsaw that will take a breather for the week. Dick Lepre, a loan agent at CrossCountry Mortgage, predicts that rates will trend flat as fixed-income markets return their attention to inflation.
What it Means for Buyers and Sellers
Lower mortgage rates mean that buyers can purchase more expensive homes with lower monthly payments. This can encourage more people to enter the real estate market, leading to increased demand, and potentially higher prices for sellers. On the other hand, higher mortgage rates may discourage buyers from purchasing homes, leading to lower demand, and potentially lower prices for sellers.
Therefore, for buyers, it is essential to keep track of mortgage rate trends and predictions to time their purchase when rates are low, leading to significant cost savings. On the other hand, sellers should keep track of mortgage rates to price their homes competitively, taking into account the impact of mortgage rates on buyer demand.
In conclusion, mortgage rate trends and predictions play a significant role in the real estate market, impacting both buyers and sellers. According to Bankrate’s weekly poll of mortgage experts, 50 percent of respondents believe that rates will go down in the coming week. However, experts caution that inflation concerns may contribute to higher rates in the long term. Therefore, buyers and sellers should keep track of mortgage rate trends and predictions to make informed financial decisions.
Mortgage Rate Predictions for the Next Month?
As homebuyers and homeowners continue to watch the real estate market, a key factor that they are also paying attention to is mortgage rates. The cost of borrowing affects affordability, and can therefore influence both demand and supply in the housing market. The past few years have seen a lot of fluctuations in mortgage rates, and many potential buyers are looking for guidance about what to expect.
The average 30-year fixed-rate mortgage (FRM) declined from 6.42% on March 23 to 6.32% on March 30, according to Freddie Mac. This decline followed two consecutive weeks of rate drops, largely attributed to the banking sector’s instability. However, we may have already seen the peak of this rate cycle. Interest rates are notoriously volatile and can fluctuate significantly, and it’s important to consider both short-term and long-term predictions.
In 2022, as inflation surged uncontrollably, the Federal Reserve implemented measures to curb it, resulting in a substantial increase in interest rates. The typical 30-year fixed-rate mortgage doubled during the year. However, as inflation gradually subsides, the Federal Reserve is now reducing the magnitude of its rate hikes. Moreover, due to concerns about a potential recession, many experts anticipate that mortgage interest rates will remain within a narrower range than the sharp spikes witnessed earlier in 2022.
Nevertheless, there remains a possibility of interest rates rising every week or in response to another global event that causes economic uncertainty.
Experts from CJ Patrick Company, Clever Real Estate, the National Association of Realtors, and others predict whether 30-year mortgage rates will climb, fall, or level off in April. Ralph DiBugnara, President at Home Qualified, predicts that 30-year and 15-year fixed mortgage rates will trend down on average, settling at 6% and 5.5%, respectively.
Nadia Evangelou, Senior Economist & Director of Forecasting at the National Association of Realtors, predicts that mortgage rates will continue to fluctuate next month depending on new developments in the banking sector.
She believes that mortgage rates will remain near 6.5%, with rates gradually moving down in the following months. Selma Hepp, Chief Economist at CoreLogic, agrees that mortgage rates will move around the 6.5% range, with the potential for moving closer to 6% in April.
Hannah Jones, Economic Data Analyst at Realtor.com, predicts that incoming economic data will determine mortgage rate movement in April. She expects that should upcoming data show inflation slowing, this dip may stabilize mortgage rates.
Tony Chahal, SVP of Partnerships at Clever Real Estate, expects the Fed to curb inflation so it’s manageable, but not be so aggressive with rate hikes that it triggers further bank failures. He believes that the Fed will be less hawkish in the short term on increasing interest rates until it has put safeguards in place to protect the banking system.
The Fed is now in a tough position as it still has maintained its goal to curb inflation to 2% annually. Annual inflation in February was 6%, well above the Fed’s target of 2%, which is particularly concerning due to the rising cost of services.
Mortgage Rate Trends
Mortgage rates fluctuated significantly to open in 2023. In the first quarter, the average 30-year fixed rate went as low as 6.09% on Feb. 2 and climbed up to 6.73% on March 9, according to Freddie Mac. The range can be largely attributed to the Federal Reserve’s ongoing fight against inflation, juxtaposed with uncertainty in the banking sector sparked by Silicon Valley Bank’s collapse. With the economy likely heading into a recession, we may have already seen the peak of this rate cycle.
The 30-year fixed rate dropped from 6.42% on March 23 to 6.32% on March 30. The average 15-year fixed mortgage rate similarly fell, going from 5.68% to 5.56%.
| Month | Average 30-Year Fixed Rate |
| February 2022 | 3.76% |
| March 2022 | 4.17% |
| April 2022 | 4.98% |
| May 2022 | 5.23% |
| June 2022 | 5.52% |
| July 2022 | 5.41% |
| August 2022 | 5.22% |
| September 2022 | 6.11% |
| October 2022 | 6.90% |
| November 2022 | 6.81% |
| December 2022 | 6.36% |
| January 2023 | 6.27% |
| February 2023 | 6.26% |
Source: Freddie Mac
Sources:
- https://www.bankrate.com/mortgages/rate-trends/
- https://themortgagereports.com/32667/mortgage-rates-forecast-fha-va-usda-conventional
