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December Neighborhood Minute: 2023 Mortgage Rate Forecast

12/22/2022

Neighborhood Minute #2, December 2022, front of a blue house.

Get a Look at the Mortgage Rate Forecast for 2023

If you entered the housing market this year, the roller-coaster ride of interest rate hikes was enough to make anyone woozy. Unfortunately, with the Federal Reserve’s latest announcement, the ride still isn’t over. But experts are saying next year’s mortgage interest rates forecast will be more stable as the market continues to course-correct. Prep for what’s next in this shifting housing market and what’s ahead in 2023.

December’s Mortgage Trend Report

Mortgage Interest Rate Forecast

  • The Federal Reserve announced its latest interest rate hike on Wednesday, December 14 of 0.50%
  • The current benchmark interest rate is 4.25%-4.5%.
  • This is the seventh consecutive interest rate hike by the Fed this year in its efforts to curb historically high inflation.
  • This latest rate hike will have an effect on borrowing power, but forecasters are predicting only a small impact on the current housing market.

Noteworthy Housing Market News

  • Mortgage rates have decreased slightly in the last month, but in 2023 they’re predicted to stabilize at about 6%.
  • The average 30-year fixed mortgage rate hit a two-decade high in early November.
  • House prices grew 11.7% on average over the last year.
  • Fewer sellers are putting homes on the market, as new listings dropped 20% from last year at this time.
  • Also, pending home sales are also down 37% from last year.

2¢ Worth of Wisdom

Q: Should I buy a house now?
A: “If you’re looking to live in that new home for five years or longer, the answer is yes. We’re currently in a housing shortage, so if you find the right house at a comfortable price, don’t feel like you have to wait. Experts are predicting that mortgage rates could start dropping toward the end of 2023 and that could provide an opportunity to refinance at a lower rate.”

—Ed Hensley, WesBanco Executive Vice President, Mortgage

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*All information cited can be found on housingwire.com.

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