To aid in putting this article into context, please make certain you check out my blog article for the June 2023 Metro Denver Market Report.
As reported in several media outlets such as Forbes Advisor, US News and World Report, GoBankingRates, CNBC and others they all are citing the following sources and their predictions for mortgage interest rates by year end 2023. Realtor.com sees rates on a gradual decline to around 6% by year end. The National Association of Realtors is also forecasting a rate of around 6% by year end and 5.6% for 2024. Fannie Mae is predicting rates as well around 6% by year end and as low as 5.4% by 2024. Mortgage Bankers Association is forecasting more aggressive declines in the rates by 2023-year end and predict rates will be 5.8% and as low as 4.9% by 2024. Bank of America is also aggressively predicting rates may fall as low as 5.25% by year end.
So, what does this mean for the seller or buyer contemplating whether now may be a good time to sell and/or buy a home? If mortgage interest rates are indeed heading for a gradual decline by year end, then it could be a great time to take advantage of this softened market. You can pick up your next home in a market where prices have dropped. As a buyer you can negotiate the price and terms of a transaction with a seller, find your next home and then when rates fall refinance your loan at a lower interest rate. A win-win. Sellers, while you may be giving up a bit on the price of your current home, if you are moving up, you could presumably expect to acquire your next home for less as well.
If rates fall over the last half of this year, it could spark a frenzy of activity driven by pent-up demand especially in the last quarter of this year. Sellers feeling more comfortable would list their homes and move and buyers currently sitting on the sidelines would be intrigued to enter the market. If this happens with our current low level of inventory it could send home prices higher. So, right now could be the time to get your next home if you have a need to move and your risk tolerance for the possible upside in the last quarter of the year outweighs waiting. You can secure your next home today with no to little competition from other buyers and then when the market prices move higher you should be in a good position to refinance your home at lower rates. Contact us if you would like to learn more about your specific neighborhood or the next place you would like to call home.