As hopeful Orangevale and Sacramento homebuyers already know, the Federal
Reserve made bold actions last year to stem inflation, which caused mortgage rates
to rapidly increase from record lows in 2021 and peak at a little over 7% in the fall.
Would-be homeowners suffered a hit to their budgets and purchasing power. Some
concluded that it was time to press “pause” on the search for a new home.
But good news is emerging! Inflation is dropping and in response, mortgage rates have dipped, too. Sam Khater, Chief Economist at Freddie Mac, shares: “Inflationary pressures are easing and should lead to lower mortgage rates in 2023.”
If you are ready to get back into the market because a boost in purchasing power makes a big difference on your monthly mortgage payment on a new home, the forecasted lower rates for 2023 may be just what the doctor ordered!
But a word of caution: If you are waiting for rates to drop to 2021 levels, you’re
going to be on the sidelines for a very long time. Greg McBride, Chief Financial Analyst at Bankrate, explains: “I think we could be surprised at how much mortgage rates pull back this year. But we’re not going back to 3 percent anytime soon, because inflation is not going back to 2 percent anytime soon.”
But remember: A mild drop in interest rates, when coupled with less buyer
competition may be the perfect recipe to get an accepted offer on a new home.
What have we learned?
Lower mortgage rates are excellent news for buyers AND sellers but waiting around
for 3% mortgage rates to return is unrealistic. Call me now, your Orangevale
Realtor, to discuss your options and learn how the current market environment
may affect your goals.
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