According to a national survey of banker lenders, mortgage rates have reached their highest level in 13 years. And many professionals say the upward climb did not hit its peak. In fact, we asked five professionals to tell us: what will be the mortgage rate this year and what does it mean for home buyers? (See the lowest mortgage rate you can qualify for here now.)
Professional predictions about mortgage rates
On May 16, the Mortgage Bankers Association predicted that the 30-year rate would close at 5% in 2022, and in April, Freddie Mac predicted that the 30-year fixed-rate mortgage would average 4.6% for the full year 2022. “Mortgage rates will rise, but not suddenly,” said Holden Lewis, a home and mortgage specialist at Nerdwallet. And Steve Rich, chief operating officer of America Mortgage Finance, predicts: “It’s possible we’ll see another increase soon – only time will tell.”
For some professionals, a 6% rate is a possibility. “Prices have already risen significantly since the beginning of the year, and they are poised to rise even higher as 2023 approaches. While this is not certain, a rate of 6% or more is possible, “said Jacob Chanel, a senior economic analyst at Lendingtree. George Ratio, a senior economist at Realtor.com, added: “If inflation continues to accelerate, we can expect mortgage rates for 30-year loans to exceed 6%.”
Here’s a look at the lowest mortgage rates you can qualify for now.
But others say the rate could soon be plateau. “It is possible that in the next few weeks or months the rates will hit the maximum ceiling and then stabilize or come back from there. A Mortgage Bankers’ Association forecasts a 33% increase in purchasing mortgage applications over the next three months from mid-April, “said Robert Heck, vice president of mortgage.
What does this mean for aspiring homebuyers?
“The rapid rise in mortgage rates is a blow to home buyers who are already competing with record home price increases. The record low mortgage rate was an affordable lifeline during the epidemic, and monthly payments were kept in check as prices reached new heights, ”said Nicole Bachaud, a district economist.
For those considering a mortgage in the coming weeks and months, Heck says it might be a good idea to evaluate and track your eligible mortgage options by keeping an eye on the loan options. But remember, this high-pressure housing market will not let you move into a home that can extend you financially.