![]() "Thirty-year fixed mortgage rates will end the year near 5.25%," he predicted. ![]() (Like CNET Money, Bankrate is owned by Red Ventures.) McBride expects rates to fall more consistently as the year progresses. "Expect mortgage rates to yo-yo up and down in the first half of the year, at least until there is a consensus about when the Fed will conclude raising interest rates," said Greg McBride, CFA and chief financial analyst at Bankrate. However, rate volatility may continue for some time. What does this mean for homebuyers this year? Mortgage rates are likely to decrease slightly in 2023, although they're highly unlikely to return to the rock-bottom levels of 20. It's still difficult for many buyers, particularly those looking for their first home, to afford a monthly payment. ![]() "Even though home prices in many parts of the country have fallen since the start of the year, high rates make buying prohibitively expensive for many," said Jacob Channel, senior economist at loan marketplace LendingTree. Fewer buyers are willing to jump into the housing market, driving demand down and causing home prices to ease, but that's only part of the home affordability equation. Mortgage rates have dipped a bit from their December 2022 peak, but they still aren't dramatically lower. Overall, inflation remains high but has been slowly but consistently falling every month since it peaked in June 2022. While rates don't directly track changes to the federal funds rate, they do respond to inflation. "We're in one of the most volatile markets in terms of rates since 2008," said Jennifer Beeston, senior vice president at Guaranteed Rate, a national mortgage lender. This could have an impact on mortgage rates, but it's difficult to say just how much for a market already in flux. The decision to hike by 0.25% on March 22 suggests that inflation is cooling and the central bank may be able to ease up - but not stop - on its rate hikes. Ahead of the Federal Reserve's May meeting, rates continue to bump around in the 6% range.Īfter raising rates dramatically in 2022, the Fed opted for smaller, 25-basis-point rate increases in its first two meetings of 2023. Rates dipped significantly in January before climbing back up in February. Mortgages hit a 20-year high in late 2022, but now the macroeconomic environment is changing again. At the same time, average rates for 5/1 adjustable-rate mortgages increased. While the 15-year fixed mortgage rates inched up, interest rates on the closely followed 30-year fixed-rate mortgage moved downwards. Mortgage rates were on a split path over the past seven days.
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