Mortgage rates continue to rise in the United States. On June 9, the average annual percentage rate on 30-year fixed mortgages was 7.07%. Meanwhile, the average 15-year fixed mortgage APR is 6.48%, according to the latest survey from Bankrate, one of the nation’s largest mortgage lenders.
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Will mortgage rates continue to rise in the US in 2023?
In recent months, mortgage rates have risen to their highest level in 20 years, causing a slowdown in buying activity. Where is the housing market headed in 2023? Bankrate questioned several real estate experts to come up with a five-year forecast for the real estate market.
According to Lawrence Yun, chief economist at the National Association of Realtors, mortgage interest rates could continue to rise. According to Yun’s forecasts, 7% could be the level of mortgage rates for the rest of this year and most of 2024. Within two years, he forecasts the rate should return to 5.5 or 6%.
Because rates are high, Yun expects higher interest on adjustable-rate mortgages over the next year. After that, however, he predicts that 90% of Americans will return to the traditional 30-year fixed-rate mortgage.
Danushka Nanayakkara-Skillington, assistant vice president of forecasting and analysis at the National Association of Home Builders predicts that rates will fall to around 6% by mid-2024.
Home Price Predictions
According to NAR, the median sales price for existing homes in the country in April of this year was $388,800. For newly built homes, the NAHB data shows that the April median sales price across the country was slightly above $420,800.
Looking ahead, Yun doesn’t see any major changes in price tags nationwide next year and predicts fluctuations of about 5 percent one way or the other. However, in five years, he expects prices to have appreciated a total of 15-25%.
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Will the housing market crash?
According to Yun, although there are some characteristics similar to a housing bubble, the residential real estate market is not expected to burst. Several experts point out that there is no danger of an imminent housing market crash, as inventory is too scarce. Also, the standards for obtaining a loan today are much stricter compared to the Great Recession.
