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Homebuyers briefly got a bit of breathing room thanks to lower mortgage rates early this year, but as they’ve headed back up, affordability has again shrunk to historically low levels.
The average 30-year fixed mortgage rate is currently 6.73%. This is 64 basis points higher than it was at the beginning of February, according to Freddie Mac.
“Mortgage rates continue their upward trajectory as the Federal Reserve signals a more aggressive stance on monetary policy,” Sam Khater, Freddie Mac’s chief economist, said in a press release. “Overall, consumers are spending in sectors that are not interest rate sensitive, such as travel and dining out. However, rate-sensitive sectors, such as housing, continue to be adversely affected. As a result, would-be homebuyers continue to face the compounding challenges of affordability and low inventory.”
Today’s Mortgage Rates
Today’s Refinance Rates
Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly and long-term payments.
By plugging in different term lengths and interest rates, you’ll see how your monthly payment could change.
Mortgage Rate Projection for 2023
Mortgage rates started ticking up from historic lows in the second half of 2021 and increased over three percentage points in 2022.
But many forecasts expect rates to fall later this year. In their latest forecast, Fannie Mae researchers predicted that 30-year fixed rates will trend down throughout 2023 and 2024.
But whether mortgage rates will drop in 2023 hinges on if the Federal Reserve can get inflation under control.
In the last 12 months, the consumer price index rose by 6.4%. This is only a slight slowdown compared to the previous month, and the Fed is likely to take this as a sign that it still has more work to do.
If the Fed acts too aggressively and engineers a recession, mortgage rates could fall further than what current forecasts expect. But rates probably won’t drop to the historic lows borrowers enjoyed a few years ago.
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Source:: Business Insider