{"id":8912,"date":"2023-08-26T06:42:39","date_gmt":"2023-08-26T06:42:39","guid":{"rendered":"https:\/\/imsfund.com\/?p=8912"},"modified":"2023-08-26T06:42:39","modified_gmt":"2023-08-26T06:42:39","slug":"mortgage-rates-reach-the-highest-point-in-20-years-how-much-higher-will-they-go","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2023\/08\/26\/mortgage-rates-reach-the-highest-point-in-20-years-how-much-higher-will-they-go\/","title":{"rendered":"Mortgage Rates Reach the Highest Point in 20 Years\u2014How Much Higher Will They Go?"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div :class=\"{ 'hidden': $store.proContent.showFullPrompt() }\">\n<section class=\"px-4 relative border border-slate-200 mobile-toc lg:hidden\" x-data=\"{open:false}\">\n<button x-on:click=\"open = !open\" class=\"flex items-center gap-4 my-2 border-none w-full\"><br \/>\n<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"h-6 w-6\" fill=\"none\" viewbox=\"0 0 24 24\" stroke=\"currentColor\" stroke-width=\"2\"><path stroke-linecap=\"round\" stroke-linejoin=\"round\" d=\"M4 8h16M4 16h16\"\/><\/svg><\/p>\n<h2 class=\"font-semibold text-slate-800 text-base m-0 js-toc-ignore\">In this article<\/h2>\n<p><\/button><\/p>\n<\/section>\n<p><span data-preserver-spaces=\"true\">Mortgage rates have been trending upward since last March when the Federal Reserve began tightening the reins on inflation. Last November, they even hit a 20-year high, clocking in at over 7% on the typical 30-year loan. Now, less than a year later, they\u2019ve broken that record again, notching yet another two-decade high at 7.23% as of Aug. 24.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Historically, that\u2019s not the highest rate we\u2019ve ever seen, but compared to the record-low rates of just two years ago, it\u2019s quite the about-face for anyone looking to buy a house. In fact, according to Redfin, as of July 30 the typical homebuyer\u2019s monthly mortgage payment is now up 19% compared to just a year ago.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The question is this: How much worse can it get? And is there any hope for lower rates on the horizon? Here\u2019s the scoop.<\/span><\/p>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">A Double Whammy for Buyers<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">If you\u2019re looking to purchase a property anytime soon, high mortgage rates only add to an already challenging situation. For one, inventory is incredibly low, and with 80% of homeowners having a current mortgage rate of 5% or less, according to Zillow, the likelihood of much existing inventory hitting the market is pretty low\u2014at least until rates drop some.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">According to\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/new-data-suggests-homeowners-are-twice-as-likely-to-sell-with-five-percent-interest-rates\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">a recent Zillow survey<\/span><\/a><span data-preserver-spaces=\"true\">, homeowners with rates under 5% are half as likely to sell their homes as those with rates above that threshold, essentially locking up a good portion of that existing inventory. (Total for-sale inventory fell 19% in July, according to Redfin, and new listings were down over 20%.)\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">This, of course, trickles down to home prices. With such low inventory, buyers are forced to compete for the few options out there\u2014keeping prices elevated until something finally shifts.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">According to the most recent Real House Price Index from First American, consumer homebuying power, defined as how much one can buy based on changes in income and mortgage rates, has now dropped 9% year over year. In addition, \u201creal\u201d home prices, which take into account mortgage rates and nominal home prices, are up a whopping 12% in the same period.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">As Mark Fleming, chief economist for First American, put it: \u201cWhile many expected that a higher mortgage rate environment would prompt house prices to adjust downward, the lack of housing inventory amid a resilient economy is keeping a floor on how low prices can go.\u201d<\/span><\/p>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What\u2019s Next?<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">We\u2019re nearing the housing market\u2019s slow season of winter and the holiday season, which is when home prices normally drop and competition wanes. According to most forecasts, we\u2019re likely nearing the peak for rates, too.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Fannie Mae\u2019s latest forecast says the 30-year fixed-rate mortgage rate will dip to 6.6% by year\u2019s end, while the Mortgage Bankers Association has its sights on a 6.2% average rate. Either way, it\u2019d be an improvement for those looking to get in on the market\u2014if they can find a property.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The trajectory of rates over the next few months will depend on what the latest economic indicators say, as well as how the Federal Reserve responds to them. As of now, the CME Group\u2019s Fed Watch Tool shows there\u2019s an around 80% chance that the Fed makes no changes to its benchmark rate next month. If that\u2019s the case, rates could moderate or even drop later on in the year.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">As for 2024, both Fannie and MBA expect a steady downtrend in rates, with MBA eyeing the lowest rate of the two\u2014an average of 5%\u2014by the end of the year. By 2025, we could see rates in the 4% range, according to the trade group.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Until then, though, homebuyers and real estate investors will have to make do with rates that are quite a bit higher than just a year or two ago. That means\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/creative-financing\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">getting creative with financing<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0(adjustable-rate and shorter-term loans), negotiating buydowns, or using\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/money-385\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">equity<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0to make bigger\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/down-payment\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">down payments<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0and, hopefully, qualify for a lower rate.<\/span><\/p>\n<div id=\"visibility-group-block_64dd56548a48e\" class=\"visibility-group  hidden\">\n<div id=\"hero-block_62df1a82bfc88\" class=\"first:mt-0 hero-block py-4    has-background has-theme-gold-light-background-color has-text-color has-theme-gold-color\">\n<div class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n<div class=\"relative z-30 w-full \">\n<main class=\"py-4\"><\/p>\n<p class=\"has-theme-gold-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Get the Best Funding<\/p>\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\">Quickly find and compare investor-friendly lenders who specialize in your unique investing strategy. It\u2019s fast, free, and easier than ever!<\/p>\n<p><\/main>\n<\/div>\n<div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n<img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  shadow-xl rounded-md hidden lg:block\" src=\"https:\/\/bpimg.biggerpockets.com\/https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Lender-Match.png\" alt=\"find a lender with lender match\" title=\"Mortgage Rates Reach the Highest Point in 20 Years\u2014How Much Higher Will They Go? 2\"\/>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"wp-block-group is-layout-constrained wp-block-group-is-layout-constrained\">\n<div class=\"wp-block-group__inner-container\">\n<div class=\"wp-block-group__inner-container\">\n<div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n<div class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n<div class=\"relative z-30 w-full \">\n<main class=\"py-4\"><\/p>\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n<p><\/main>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p class=\"italic\"><b>Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n<\/div>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.biggerpockets.com\/blog\/mortgage-rates-reach-20-year-high\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this article Mortgage rates have been trending upward since last March when the Federal Reserve began tightening the reins on inflation. Last November, they even hit a 20-year high, clocking in at over 7% on the typical 30-year loan. Now, less than a year later, they\u2019ve broken that record again, notching yet another two-decade [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":8913,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"fifu_image_url":"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/08\/neighborhood-1-1024x517.jpg","fifu_image_alt":"","footnotes":""},"categories":[9],"tags":[],"class_list":["post-8912","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/8912","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/comments?post=8912"}],"version-history":[{"count":1,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/8912\/revisions"}],"predecessor-version":[{"id":8914,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/8912\/revisions\/8914"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media\/8913"}],"wp:attachment":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media?parent=8912"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/categories?post=8912"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/tags?post=8912"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}