The feverish pitch of mortgage rates in 2023 has taken an intriguing turn, showing signs of a retreat in November. After reaching the peak of 7.79% in October—the highest for the year—rates edged down, culminating at 7.22% by the end of November, per the latest weekly data from Freddie Mac.
The easing of interest rates has many buyers and sellers wondering how low rates might go, and when.
Predictions from Industry Leaders
It’s impossible to predict the future. However, Forbes has gathered insights from industry leaders and shares the following predictions for interest rates:
1. National Association of Realtors chief economist Lawrence Yun. “Mortgage rates look to head towards 7% in a few months and into the 6% range by the spring of 2024.”
2. RSM U.S. real estate senior analyst Crystal Sunbury. “Assuming no significant economic shocks, mortgage rates are likely to continue slowly easing over the next few months, to reach a 6% to 6.5% range by spring of 2024.”
3. Mortgage Bankers Association (MBA). MBA’s baseline forecast is for mortgage rates to end 2024 at 6.1% and reach 5.5% at the end of 2025 as Treasury rates decline and the spread narrows.
4. Bank of America head of retail lending Matt Vernon. “The Fed’s likely decision to cut rates in 2024 would be a key factor that could breathe new life into the housing market. However, it’s important to note that significant drops in mortgage rates might not happen in the early months of 2024. If any reductions occur, they are likely to be gradual, possibly beginning in the latter part of the year.”
5. Palisades Group chief investment officer and co-founder Jack Macdowell. “Our best guess is that mortgage rates will remain in the 7% to 7.25% range throughout Q1 2024. This view is based on the idea that inflation is trending positively toward the 2% target and the Federal Reserve is likely done raising interest rates in 2023.”
6. Ally Home president Glenn Brunker. “With the current mortgage rates pricing around 7.5% today, we can expect them to be nearing their top and begin their descent in the first half of 2024.”
The Takeaway
Buyers, sellers, and industry professionals must stay vigilant and adapt to the evolving conditions. Assessing the dynamics between mortgage rates, home prices, and broader economic factors is crucial for making informed decisions in the current real estate environment.
Navigating these market conditions requires a seasoned Realtor with extensive neighborhood experience. Here at the Remington/Crispeno Real Estate Team, we offer a wide spectrum of tools for both buyers and sellers and that’s exactly what you need in today’s market!