2023 Mortgage Market Trends

2023 will be a year of uncertainty.  Financing options and education for buyers will be paramount.

Last year the Federal Reserve took action to combat the highest inflation increase in 40 years.   In response to those efforts, we all witnessed conforming mortgage rates jump rapidly, from record lows in 2021 to the greatest increase in decades topping 7%.  Buyers realized the hit to their purchasing power as a result and many put a hold on purchasing a new home all together.   With the Feds efforts we are starting to see results.  Secondary market rates have settled in the low 6% range over the past month or two.  If some economists are right about possible recession mid-year, in my opinion, we could be surprised how much rates will pull back this year.  Could we see a thirty-year fixed sub 5%?  

What realtors and lenders will need to do, is educate their buyers with realistic expectations.  Buyers will need to have a clear understanding of their purchasing price point and loan options.  Offering alternative options like a variable-rate mortgage that is fixed for 5 or 7 years might be a better financial fit.   My recommendation is to have buyers schedule a time to sit down face-to-face, with their local mortgage lender, to review their loan options and eliminate any uncertainty and anxiety in this uneasy market.  Well prepared buyers will have the best chance in securing their dream home.