Friday, The average fixed rate 30-year mortgage hop to 7.19%. Over the past few months, mortgage rates have risen again. Financial markets, which responded to the stronger-than-expected labor market data, are now factoring in the higher odds of the Fed staying at higher interest rates for an extended period.
This is the rise in mortgage rates It points to another decline in housing affordability in the United States. For example, a borrower who took out a $500,000 mortgage with a fixed rate of 5.99% in early February 2023 would have had a monthly payment of $2,995 towards principal and interest. However, at a rate of 7.19% (which was Friday’s average), the same borrower would face a monthly payment of $3,391 for a loan of the same size.
Looking into the future, economists emphasize three factors that can improve housing affordability: increasing incomes, lowering home prices, and lowering mortgage rates. Of these factors, mortgage rates can exert the most influence in the short term. This is due to the fact that home prices tend to be flat, and income growth has limitations even in a strong job market.
Where do mortgage rates go from here? to get some clues, luck Track mortgage rate forecasts from nine leading research firms. However, it is important to acknowledge that predicting future mortgage rates is a difficult task, and recent history has shown that mortgage rate forecasters have struggled.
Mortgage Bankers Association: The commercial group headquartered in the capital Projections are that the 30-year fixed rate mortgage rate will be 5.9% in the fourth quarter of 2023.. After this year, the group expects mortgage rates to drop to 4.9% By the fourth quarter of 2024.
morning star: Economists at the Morningstar Project that the average 30-year fixed rate mortgage will average 6.25% in 2023, 5.0% in 2024 and 4.0% in 2025.
Goldman Sachs: investment bank projects That the rate for a 30-year fixed mortgage will end 2023 at 6.4%. In 2024, Goldman Sachs predicts that the 30-year fixed-rate mortgage rate will average 5.9%.
National Association of Realtors: Economists at NAR Forecast that the 30-year fixed mortgage rate will drop to 6.4% before the end of 2023, and then to 6.0% In the year 2024.
Morgan Stanley: MBS’s agency strategist Morgan Stanley The project that the 30-year fixed rate mortgage will start in 2024 6.0%.
Moody’s Analytics: Moody’s financial intelligence arm still expects the 30-year fixed mortgage rate to be 6.5% through most of 2023. Moody’s Analytics chief economist Mark Zandi said luck which he expects to slip into 6.0% by the end of 2024, and then 5.5% in 2025.
realtor.com: Economists believe in the main menu site The 30-year fixed rate mortgage will start in 2024 6.1%.
Fannie Mae: economists in Fannie Mae Expect the average 30-year fixed rate mortgage rate to be 6.6% in the fourth quarter of 2023. Then You expect Fannie Mae Mortgage rates decline to an average of 5.9% in the fourth quarter of 2024. For the calendar year, Fannie Mae expects mortgage rates to average 6.1% In the year 2024.
This story originally appeared on Fortune.com
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