Will Rates Go up through the rest of 2023?

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Will Rates Go up through the rest of 2023?

The Federal Reserve has a difficult decision to make for the second half of 2023.

An Open Market Committee meeting is scheduled for the 25th & 26th of next week, and everyone in the financial sector along with consumers looking to purchase a new home as first-time buyers or, buyers looking for an upgrade in housing are waiting to see what comes next.

The FED has a responsibility of trying to maintain an inflation rate of around 2%. This gives consumers confidence that pricing and affordability may stabilize.

Since the 41-year high of 9.1% in June 2022, we have seen a slow and gradual decline in the national inflation rate to 3% in June 2023. The FED has gone from a 50 to 75 basis point hike throughout late 2022, to a 25-basis point hike in early 2023.

To get the inflation rate to decrease, interest rates were increased in hopes of seeing a cooling of U.S. inflation percentages. Which is exactly what has happened.

More than likely, we will see a small interest rate increase following next week’s Open Market Committee meeting.

If you have been paying attention to what rates have done in the first half of 2023, you have noticed gradual increases at the beginning of each week and a slight drop by the end of the week going into the weekend. This has been the pattern and I assume, will be the pattern for the rest of the second half of 2023.

The 30-year fixed mortgage rate hit 6.96% last week and moving in the wrong direction for U.S. consumers this week, I am expecting interest rates to level off until the minutes from next week’s meeting are released.

Once the financial sector has time to digest what will come from next week’s Open Market Committee meeting minutes, I feel rates will start to decrease slightly.

Even if the FED’s plan is for a basis point hike of around 25 points.

My advice to anyone looking to buy is to watch your local real estate market in your price range online and make sure you are working with a knowledgeable mortgage advisor (like me) who knows when to lock your rate and what lenders have specific loan programs or incentives for you.

If you are looking to refinance your home to access your hard-earned equity in your biggest asset, your home, to pay down the credit card or personal loan high-interest rates that have accumulated during the COVID era. Make sure your mortgage advisor (me) has a long-game approach for you and your financial well-being in the near future.

DO NOT transact a traditional rate & term refinance through the rest of 2023.

Wait for the beginning or middle of 2024.

The current administration in the White House is going to do everything possible to lower gas prices, food prices, and interest rates, as we move toward the 2024 national elections.

They will want to flood the mainstream media with accomplishments to get the American electorate to try and forget about the past three years economically.

This is when you may have an opportunity to get a lower interest rate. Once again, make sure you are working with a knowledgeable and experienced mortgage advisor (me) to make sure you get the best bang for your buck.

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Gustan Cho Associates News | Dustin Dumestre Friday Mortgage Minutes NEWS For July 21st, 2023

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