If you looked at house prices the past few years, you could easily say that low interest rates helped move house prices higher (in 2020 and 2021) and rapidly rising rates, equated to slower and even falling home prices (in 2022).
Many forecasts I see right now, are calling for higher interest rates in 2023 and therefore lower house prices.
Freddie Mac says interest rates will end 2023 at 6.8%, the National Association of Realtors says rates could stay near 7% and Realtor.com says they expect 30 year fixed rates to be 7.1%.
The good news about those predictions, is that these are the same “experts” whose mortgage interest rates forecasts were all way too low in 2023 and thought there we no chance of a housing slowdown in 2022.
Historically, when it comes to big moves in house prices and interest rates, it’s very tough to predict a large move ahead of time.
However, I am going to make a prediction that we have seen the high point in mortgage interest rates.
This coming Wednesday, the Federal Reserve will meet and they will raise rates again, most likely by .50%. However, the market already knows this and it’s already priced into long term interest rates. That’s not what matters, as much as what they say they will do going forward. I will have another video about that next week.
I have seen a lot of doom and gloom lately about where house prices are going in 2023, but that’s tied to higher interest rate forecasts. If interest rates move lower next year, then things may not be so bad for house prices in 2023.
For more information on current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 703-5844 or by emailing: bill@strategicmtgaz.com or online at www.strategicmtgaz.com
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