November 8, 2023
At the start of 2023, many economists’ predictions indicated gradually declining mortgage rates throughout the year. Unfortunately, those forecasts haven’t come true. Rates continue to trend higher. If it feels hard to keep track of the near daily rate fluctuations, you’re not alone. You can keep track here to stay up to date on the latest interest rate trends.
The past year’s fluctuating rates and upward trends have left many borrowers, both buyers and sellers, unsure of where they stand. Should you wait for rates to fall before locking one in? Or will mortgage rates continue to rise?
Why are mortgage rates going up?
Recent stubborn rates are a result of the Federal Reserve’s determination to bring annual inflation back down to 2%, like it was in 2012. Inflation and interest rates are closely tied, with a tendency to move in the same direction. This is due to the fact that interest rates are the primary tool used by the U.S. central bank to manage inflation. In other words, the high interest rates are generally because of a policy response to the rising inflation.
As it currently stands, the central bank continues to raise interest rates to combat inflation.
Will mortgage rates go down in 2024?
While rates may not fall as low as they were during the pandemic, you can see what economists with the National Association of Realtors current interest rate projections and future predictions are on their website.
For the most part, experts agree that the 30-year fixed mortgage rate should remain high for the remainder of 2023. So, even though rates may not rise too much in the upcoming months and the beginning of 2024, don’t expect them to fall drastically right away either.
Bottom line: mortgage rates will stay elevated, as no one is sure if/when they will stabilize or fall.
Projected interest rates in five years
Unfortunately, there’s no crystal ball that can show us exactly what interest rates will look like over the next few years. Even the best economists make predictions that don’t come to fruition (i.e., 2023’s incorrect mortgage rate projections). Nothing is set in stone, but there are hopeful predictions for the future that borrowers should be aware of.
According to Longforecast’s algorithm, mortgage rate predictions indicate a notable decrease over the next five years, suggesting the opportunity to secure lower rates is just over the horizon for borrowers, benefiting homeowners and buyers alike.
At the end of the day, there’s no guarantee in the future trend of mortgage rates. That’s why it’s important to pay attention to the financial climate, stay up to date with projected rates, and plan ahead. While many factors that control the trends of interest rates are out of your hands, there are steps you can take to help you secure a low rate — starting by choosing a lender you can rely on to walk you through every step of the process, whether you’re buying or refinancing.