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Will Rates Go Down in November 2023? | Rates Forecast

By: Paul Centopani

October 12, 2023 – 16 min read

Will Rates Go Down in November 2023? | Rates Forecast (themortgagereports.com)

Mortgage rate forecast for next week (Oct. 16-20)

Interest rates increased for the fifth week in a row, climbing to the highest point since December 2000.

The average 30-year fixed rate mortgage (FRM) rose from 7.49% on Oct. 5 to 7.57% on Oct. 12, according to Freddie Mac.

“The good news is that the economy and incomes continue to grow at a solid pace, but the housing market remains fraught with significant affordability constraints. As a result, purchase demand remains at a three-decade low,” said Sam Khater, Freddie Mac’s Chief Economist.

Find your lowest mortgage rate. Start here (Oct 12th, 2023)

In this article (Skip to…)

·         Will rates go down in November?

·         90-day forecast

·         Expert rate predictions

·         Mortgage rate trends

·         Rates by loan type

·         Mortgage strategies for November

·         Mortgage rates FAQ

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Will mortgage rates go down in November?

Mortgage rates fluctuated significantly to open 2023 and mostly trended upward to start the second half. The average 30-year fixed rate went as low as 6.09% on Feb. 2 and climbed up to 7.57% on Oct. 12, according to Freddie Mac.

Find your lowest mortgage rate. Start here (Oct 12th, 2023)

The range can be largely attributed to the Federal Reserve’s ongoing fight against inflation, juxtaposed with uncertainty in the banking sector sparked by Silicon Valley Bank’s collapse. However, with duress permeating the financial market and the fallout from U.S. debt ceiling talks, the Fed may continue making hikes to bring interest rates down.

With the economy likely heading into a recession, it’s possible we’ve already seen the peak of this rate cycle. Of course, interest rates are notoriously volatile and could tick back up on any given week.

Experts from CoreLogic, First American, CJ Patrick Company, and others weigh in on whether 30-year mortgage rates will climb, fall, or level off in November.

Expert mortgage rate predictions for November

Ralph DiBugnara, president at Home Qualified

Prediction: Rates will rise

“Unexpectedly, the unemployment rate was unchanged in September and payrolls have increased. This is great for the job economy but bad for mortgage rates. When employment is steady and payrolls increase, spending increases. With increased spending comes higher inflation, this will continue to keep rates higher as the Fed seems to believe that without a softer job market inflation will stay high. In November, I see an average 30-year fixed rate of 7.75% and 7% for the average 15-year fixed.”

Danielle Hale, chief economist at Realtor.com

Prediction: Rates will rise

“Heading into October, investors were already repositioning for “higher for longer” short-term rates which caused a steady upward swing in longer-term treasuries and mortgage rates. The jobs report showing that companies continued adding to payrolls in September immediately pushed both longer term treasury and mortgage rates higher amid concern that an additional Fed rate hike may be needed, raising the specter that “higher for longer” may be longer and higher than most had anticipated.

With rates in the mid-to-upper 7s to start October, 8% is a more realistic possibility than it had seemed just a few weeks ago. The jobs data is just one piece of information, however, and it’s possible that we’ll see further improvement in inflation data that would help mortgage rates stabilize or even begin to decline modestly. But even a helpfully low inflation reading is likely to mean mortgage rates remain well above 7% in the month ahead.”

Selma Hepp, chief economist at CoreLogic

Prediction: Rates will rise

“Mortgage rates are likely to remain closer to 8% until the Fed meeting on November 1. With September job numbers, the odds of another hike have increased which is putting upward pressure on mortgage rates. However, rates should start declining after the meeting if more certainty is offered of Fed’s actions, and inflation readings continue to come in.”

Odeta Kushi, deputy chief economist at First American

Prediction: Rates will moderate

“According to the CME FedWatch tool, the odds that the Federal Reserve will hold rates steady in November are approximately 70%. Yet, non-farm payrolls blew past expectations in September, casting doubt on the narrative that the labor market is slowing.

If incoming labor market and inflation data surprise to the upside and prompt more aggressive contractionary monetary policy from the Fed than expected, mortgage rates could increase. However, if inflation continues to head towards the Fed’s 2% target and the labor market is cooling, Treasury yields may retreat, providing buyers some reprieve from rising mortgage rates.”

Rick Sharga, president and CEO at CJ Patrick Company

Prediction: Rates will rise

“It’s clear that the financial markets are a bit unsettled right now – bond yields have risen to their highest levels in 16 years, pushing mortgage rates higher. It’s not out of the question that rates on a 30-year fixed rate mortgage could hit 8% in November before settling down. So in the near term, these higher rates will probably dampen demand for housing and depress loan volume even further, but in the long run rates will ultimately start to decline once the Federal Reserve ends its current Fed Funds rate hike cycle.”

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Mortgage interest rates forecast next 90 days

As inflation ran rampant in 2022, the Federal Reserve took action to bring it down and that led to big interest rate growth. The average 30-year fixed-rate mortgage more than doubled within the course of the year.

Find your lowest mortgage rate. Start here (Oct 12th, 2023)

With inflation gradually cooling, the size of the Fed’s rate hikes are coming down. Additionally, the likelihood of a recession has many experts believing mortgage interest rates will move within a tighter range compared to the spikes we saw in early 2022.

Of course, rates could rise on any given week or if another global event causes widespread uncertainty in the economy.

Mortgage rate predictions for 2023

The 30-year fixed-rate mortgage averaged 7.57% as of Oct. 12, according to Freddie Mac. All five major housing authorities we looked at projected 2023’s fourth quarter average to finish below that.

The Mortgage Bankers Association and National Association of Realtors sit at the low end of the group, predicting the average 30-year fixed interest rate to settle at 6.3% for Q4. Meanwhile, Fannie Mae has the highest forecast of 7.1%.

Housing Authority 30-Year Mortgage Rate Forecast (Q4 2023)
Mortgage Bankers Association 6.30%
National Association of Realtors 6.30%
Wells Fargo 6.75%
National Association of Home Builders 6.80%
Fannie Mae 7.10%
Average Prediction 6.65%

Current mortgage interest rate trends

Mortgage rates increased for the fifth consecutive week.

The average 30-year fixed rate rose from 7.49% on Oct. 5 to 7.57% on Oct. 12. The average 15-year fixed mortgage rate also grew, going from 6.78% to 6.89%.

Get started shopping for mortgage rates (Oct 12th, 2023)

Month Average 30-Year Fixed Rate
September 2022 6.11%
October 2022 6.90%
November 2022 6.81%
December 2022 6.36%
January 2023 6.27%
February 2023 6.26%
March 2023 6.54%
April 2023 6.34%
May 2023 6.43%
June 2023 6.71%
July 2023 6.84%
August 2023 7.07%
September 2023 7.20%

Source: Freddie Mac

After hitting record-low territory in 2020 and 2021, mortgage rates climbed to a 23-year high in 2023. Many experts and industry authorities believe they will follow a downward trajectory into 2024. Whatever happens, interest rates are still below historical averages.

Dating back to April 1971, the fixed 30-year interest rate averaged around 7.8%, according to Freddie Mac. So if you haven’t locked a rate yet, don’t lose too much sleep over it. You can still get a good deal, historically speaking — especially if you’re a borrower with strong credit.

Just make sure you shop around to find the best lender and lowest rate for your unique situation.

Compare Lenders For October:

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Our Score

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A+ BBB Rating, 253k+ Positive Reviews

·         Direct Lender, Large Variety Of Loan Products

·         Online Mortgage Application and Live Agents Available

·         Down Payment and First-Time Homebuyer Programs

·         Offers Flexible Terms from 8 to 30 Years

Get RatesRead review

Our Score

4.8

America’s largest online mortgage lender

·         Multiple Loan & Refinance Options to Fit Your Specific Needs

·         Industry-Leading Online Tools

·         Award Winning Client Service

·         A+ Rating with the BBB

Get RatesRead review

Our Score

4.7

Find a simple mortgage that works for you

·         35+ years of industry expertise

·         Award-winning service, start-to-finish support

·         Fixed rates, custom terms

·         Apply online for free, anytime

Get RatesRead review

Our Score

4.7

Get Rates and Pre-Qualified in 3 Minutes

·         Home Purchase, Refinance, Home Equity & 2nd Mortgages

·         Low Rates: Instant Quote & Credit Approval

·         Rate Lock Protection, Lock Now Before Rates Go Up

·         Over $100 Billion Funded. 21 Years in Business

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Mortgage rate trends by loan type

Many mortgage shoppers don’t realize there are different types of rates in today’s mortgage market. But this knowledge can help home buyers and refinancing households find the best value for their situation.

Find your lowest mortgage rate. Start here (Oct 12th, 2023)

Which mortgage loan is best?

The best mortgage for you depends on your financial situation and your goals.

For instance, if you want to buy a high-priced home and you have great credit, a jumbo loan is your best bet. Jumbo mortgages allow loan amounts above conforming loan limits, which max out at $726,200 in most parts of the U.S.

On the other hand, if you’re a veteran or service member, a VA loan is almost always the right choice. VA loans are backed by the U.S. Department of Veterans Affairs. They provide ultra-low rates and never charge private mortgage insurance (PMI). But you need an eligible service history to qualify.

Conforming loans and FHA loans (those backed by the Federal Housing Administration) are great low-down-payment options.

Conforming loans allow as little as 3% down with FICO scores starting at 620. FHA loans are even more lenient about credit; home buyers can often qualify with a score of 580 or higher, and a less-than-perfect credit history might not disqualify you.

Finally, consider a USDA loan if you want to buy or refinance real estate in a rural area. USDA loans have below-market rates — similar to VA — and reduced mortgage insurance costs. The catch? You need to live in a ‘rural’ area and have moderate or low income to be USDA-eligible.

Mortgage rate strategies for November 2023

Mortgage rates displayed their famous volatility in 2023. Uncertainty in the banking sector led to downtrends, but ongoing inflation battles, Fed hikes and a hot job market drove growth.

Find your lowest mortgage rate. Start here (Oct 12th, 2023)

At its July meeting, the Fed made a small hike in its continue fight against inflation. Then in September, the central bank held off on a rate hike, preferring to see if the economy would keep cooling organically. Going forward, the FOMC said it would adjust its policies as necessary — which could mean additional hikes or possibly none at all.

Here are just a few strategies to keep in mind if you’re mortgage shopping in the coming months.

Be ready to move quickly

Indecision can lead to failure or missed opportunities. That holds true in home buying as well.

Although the housing market is becoming more balanced than the recent past, it still favors sellers. Prospective borrowers should take the lessons learned from the last few years and apply them now even though conditions are less extreme.

“Taking too long to decide to make an offer can lead to paying more for the home at best and at worst to losing out on it entirely. Buyers should get pre-approved (not pre-qualified) for their mortgage, so that the seller has some certainty about the deal closing. And be ready to close quickly — a long escrow period will put you at a disadvantage.

And it’s definitely not a bad idea to work with a real estate agent who has access to “coming soon” properties, which can give a buyer a little bit of a head start competing for the limited number of homes available,” said Rick Sharga.

Buyer demand is lower than a typical year, but the market usually heats up in spring and summer. Being decisive (and prepared) should only play to your advantage.

Shopping around isn’t only for the holidays

Since interest rates can vary drastically from day to day and from lender to lender, failing to shop around likely leads to money lost.

Lenders charge different rates for different levels of credit scores. And while there are ways to negotiate a lower mortgage rate, the easiest is to get multiple quotes from multiple lenders and leverage them against each other.

“For potential home buyers, it’s important to get quotes from multiple lenders for a mortgage, as rates can vary dramatically, especially during such a volatile period,” said Odeta Kushi.

As the mortgage market slows due to lessened demand, lenders will be more eager for business. While missing out on the rock-bottom rates of 2020 and 2021 may sting, there’s always a way to use the market to your advantage.

How to shop for interest rates

Rate shopping doesn’t just mean looking at the lowest rates advertised online because those aren’t available to everyone. Typically, those are offered to borrowers with great credit who can put a down payment of 20% or more.

The rate lenders actually offer depends on:

·         Your credit score and credit history

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