The average rate for a 30-year fixed-rate mortgage was 6.42% for the week ending Dec. 29, according to Freddie Mac’s Primary Mortgage Market Survey. This was a slight increase from the previous week when it averaged 6.27%, yet it remains significantly higher than last year when it was 3.11%.
We asked our team of experts to weigh in on the recent changes to the interest rate and what it might mean for potential homebuyers and investors.
Managing Director, Residential Brokerage
A drop in interest rates has helped buyers, who might otherwise be struggling to compete in the previous market, get back out there and start looking again. They feel more upbeat and ready to tackle the homebuying process. Additionally, there was an increase in conventional loan limits on single-family homes, which will also help make things easier for potential homebuyers.
Director, Debt & Structured Finance
Rates have fallen recently but Jerome Powell, the Federal Reserve Chairman, has indicated they will continue to increase the Fed Funds rate, albeit at a slower rate, as long as the economic conditions continue to improve. The market expects (and hopes to see) more stability in interest rates in the first quarter of 2023.
Chief Financial Officer
Mortgage interest rate movements are very hard to predict, especially in a very unpredictable economic climate. With all this variability, it is important to understand that waiting to purchase a home when interest rates get lower could just as easily lead to higher mortgage rates in the future. “We expect [rates] to be volatile until we see even further deceleration of inflation,” adds Nadia Evangelou (Senior Economist and Director of Forecasting for the National Association of Realtors)
You may expect to see temporary dips along the way as the economy slows down but if you can afford to buy a home now, it is always a wise investment. A home is a long-term investment and as such there will certainly be an opportunity to refinance it when rates come down in the future. This way, you can enjoy your new home now rather than trying to time the market and lose out on a new home. Although we enjoyed historically low interest rates over the last several years, I expect that interest rates will likely stabilize sometime in the near future.
We’re focused on your future. If you’re considering buying a home, investing in a real estate portfolio, or you’d like to know what these interest rate changes mean for your property, get in touch with us at 617.314.9400 or fill out our contact form to get matched with an experienced real estate professional.
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