Higher mortgage rates and concern about the economy continue to cool down the real estate market.
Mortgage rates have dropped about a half percentage point from their peak of around 7% in October, but what can we expect for 2023?
“The Federal Reserve is going to slow the pace of their rate hikes and as the economy slows, and if we get some moderation in inflation, that’s going to be better news for mortgage rates,” said Greg McBride, chief financial analyst at Bankrate.com. “But don’t hold your breath; mortgage rates aren’t going back to 4% anytime soon.”
McBride says mortgages rates may fall if the economy slows dramatically or enters into a recession, as many economists predict.
“When the economy’s weak’ nobody wants to buy a house, regardless of what happens with mortgage rates,” McBride said.
And what about credit card interest rates? They will follow interest rate hikes by the Fed.
“The Federal Reserve is likely to continue to raise rates a few more times in 2023, so you’ve already got record high credit card rates, and they’re going to continue to go higher for the foreseeable future.”
More Info: How much will the Fed raise rates in 2023? Here’s what experts are saying
