In 2023, the number of home sales is expected to be around 4.47 million in the United States.
Experts study the housing market, and people make predictions about the future, but the reality is the market can change at any time. We’ve seen it happen in the past, and it’s likely to take us by surprise again.
If you’re considering buying a house, one of the first things you want to look at is housing interest rates. The higher the interest rate, the more money you’re going to spend, so it’s best to get the lowest possible rate.
In this article, we are going to tell you everything you need to know about home interest rates in 2023. Keep reading so you can make an informed decision next year.
Why Rates Increase
In 2022, there was a large jump in mortgage rates, and people are wondering, “will interest rates go down in 2023?”. The main reason housing interest rates have increased so much is due to inflation.
When interest rates increase, people become discouraged and stop taking out loans for homes and vehicles. Inflation is a global issue, not just an issue in the United States. Part of the reason inflation is skyrocketing right now is because of supply chain issues, government spending, and stimulus money.
Causes For Decreased Rates
One of the reasons we may see a decrease in rates in 2023 is that there is less demand. In 2021 interest rates were at an all-time low, which encouraged people to purchase homes. Since interest rates have increased drastically, homes are less affordable, leading to a decrease in demand.
If fewer people are buying houses, it’s likely interest rates will drop. Saying that, it’s not predicted that they will drop by a lot.
Interest rates are also directly affected by the government. The U.S. Federal Reserve doesn’t set mortgage rates, but it does make announcements about policies that influence rates.
Borrowing In 2023
Interest rates hit a high in 2022. This past November, rates hit 7.08%. In January 2022, rates were only at 3.08%, which is a big jump.
It may seem like an impossible dream to purchase a house now, but there is some hope. While the rates may continue to rise slowly in early 2023, it’s estimated that home interest rates will fall later in the year.
The housing market can change any day, it’s cyclical, so it’s constantly going up and down. If you choose to wait, you may pay more; however, at this time, that’s not expected.
If you decide to purchase now, it’s advised that you get an interest rate that is 7% or below. This will make it more affordable, and you can refinance in the future for a better rate.
Housing Interest Rates
Purchasing a home can be overwhelming, and the process becomes even more stressful when interest rates are high. It can be difficult to know when the right time to buy and sell is, especially if you aren’t an expert in real estate, but we’ve got you covered.
If you’re thinking about purchasing a home or have questions, contact our team. We are knowledgeable about housing interest rates and can help you make an informed decision.