Waiting for 3% Interest Rates? Think Again

Last year, the Federal Reserve took action to try to bring down inflation. In response to those efforts, mortgage rates jumped up rapidly from the record lows we saw in 2021, peaking at just over 7% last October. Hopeful buyers experienced a hit to their purchasing power as a result, and some decided to press pause on their plans.

 

 

Today, the rate of inflation is starting to drop. And as a result, mortgage rates have dipped below last year’s peak. Sam Khater, Chief Economist at Freddie Macshares:

“While mortgage market activity has significantly
shrunk over the last year, inflationary pressures
are easing and should lead to lower mortgage rates in 2023.”

 

That’s potentially great news if you’re a buyer aiming to jump back into the housing market. Any drop in mortgage rates helps boost your purchasing power by bringing down your expected monthly mortgage payment. This means the lower mortgage rates experts forecast this year could be just what you need to reignite your homebuying goals.

While this opens up a window of opportunity for you, remember: you shouldn’t expect rates to drop back down to record lows like we saw in 2021. Experts agree that’s not the range buyers should bank on. Greg McBride, Chief Financial Analyst at Bankrateexplains:

“I think we could be surprised at how much
mortgage rates pull back this year.
But we’re not going back to 3% anytime soon,
because inflation is not going back to
2% anytime soon.

 

It’s important to have a realistic vision for what you can expect this year, and that’s where the advice of expert real estate advisors is critical. You may be surprised by the impact even a mild drop in mortgage rates has on your budget. If you’re ready to buy a home now, today’s market presents the opportunity to get a more affordable mortgage rate, find your dream home, and face less competition from other buyers.

 

Bottom Line

The recent pullback in mortgage rates is great news – but if you’re ready to buy now, holding out for 3% is a mistake. Work with a local real estate expert to explore the options in your area and learn how today’s rates impact your goals.

 


 

As always . . .

Be sure to check out the:

Don’t forget the Home Buying and Selling Guides !

Never miss an issue by subscribing below and I look forward to speaking with  you soon!

Check out this article next

The Pros and Cons of Buying a New Construction Home

The Pros and Cons of Buying a New Construction Home

New construction homes can be a great option for buyers, especially those who are struggling to find pre-built homes in a hot real estate market.…

Read Article
About the Author

Northern Virginia area has always been home for me and has much to offer as your lifestyle requirements move forward. My consultative background for the technology companies in market analysis, go-to-market strategy and leading change is what I bring to my clients when they are searching for home or looking to make a change. No two clients have the same requirements and I am passionate about helping to match clients with my Northern Virginia home and their current lifestyle!   

My mission is to help you with the service, technology, and marketing strategy you should expect and demand from a Realtor. You are embarking on what should be a fun and exciting adventure, let me remove the stress so you can enjoy yourself! Therefore, I am partnered with the best in the industry - Keller Williams Realty. The real estate market is evolving technically which is extremely exciting and I am applying technology and marketing strategy for clients everyday.   

I have watched Northern Virginia grow and evolve, I grew up boating and skiing on the Occoquan, am a Purple Bleeding James Madison University alumni, hometown sports fan, foodie and a fitness fanatic who is here to serve you in making your next move and finding home!   

Now let’s find your home in Northern Virginia!   

Michele Hudnall | @RealEstateOfNVA | [email protected] | 703.867.3436

Check out the monthly Real Estate of NVA Report for in depth analysis of the Northern Virginia market story!