By: Paul Centopani
September 11, 2023 – 16 min read
https://themortgagereports.com/32667/mortgage-rates-forecast-fha-va-usda-conventional#loan-purpose
Mortgage rate forecast for next week (Sept. 11-15)
Interest rates crept down for the second week in a row.
The average 30-year fixed-rate mortgage (FRM) decreased from 7.18% on Aug. 31 to 7.12% on Sept. 7, according to Freddie Mac.
“The economy remains buoyant, which is encouraging for consumers. Though inflation has decelerated, firmer economic data have put upward pressure on mortgage rates which, in the face of affordability challenges, are straining potential homebuyers,” said Sam Khater, chief economist at Freddie Mac.
| Will mortgage rates go down in October?
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 7.23% on Aug. 24, according to Freddie Mac. Find your lowest mortgage rate. Start here (Sep 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 First American, CJ Patrick Company, Beeline, and others weigh in on whether 30-year mortgage rates will climb, fall, or level off in October. Expert mortgage rate predictions for October Ralph DiBugnara, president at Home Qualified Prediction: Rates will moderate “The market has truly been uncertain on where the economy and or interest rates are headed. Although, as inflation has trended down it still has not gotten down to levels the Fed has been targeting. I do not believe we will see a fed rate raise, if there is any at all this year, until November. The Fed has discussed one more raise and that seems to be the most likely target month. For October I see rates on a 30-year fixed holding around 7.375% and the 15-year fixed at 6.875%. Danielle Hale, chief economist at Realtor.com Prediction: Rates will drop “The economy is nearing an inflection point. As a result, mortgage rate volatility may continue until it is clear that the economic landing has actually occurred and we are not seeing a touch-and-go on growth that could reignite inflation. Eventually, as it becomes clear that the economy is on a stable path and inflation has retrenched, we expect to see mortgage rates trend lower. This could already be underway and may continue into October, but we may also get a surprise data reading that delays the eventual settling back of rates overall and mortgage rates specifically.” Jess Kennedy, co-founder and COO at Beeline Prediction: Rates will moderate “With an anticipated Fed pause, the sentiment is that rates will remain flat or slightly decrease. That pause in rate hikes operates as a big signal to the market that will start to push rates lower. We don’t expect big changes but this may be the start of a downward trend.” Odeta Kushi, deputy chief economist at First American Prediction: Rates will moderate “While the labor market is noticeably cooling and inflation continues to decelerate, the Federal Reserve will likely maintain a restrictive stance of monetary policy until inflation returns to its 2% target on a sustained basis. As a result, mortgage rates are unlikely to meaningfully decline in the near term. However, if inflation continues to trend in the right direction and the Federal Reserve decides to pause interest rate hikes, prospective buyers could get some reprieve from rising mortgage rates.” Rick Sharga, president and CEO at CJ Patrick Company Prediction: Rates will moderate “Mortgage rates have been stubbornly high over the past month, driven in part by increased yields in the bonds market. Both mortgage rates and yields on U.S. Treasury notes seem to be rising due to rhetoric from the Federal Reserve, which has signaled that it may need to raise Fed Funds rates higher – and keep them higher longer – than what the market had been anticipating. It’s still likely that mortgage interest will start to come down later this year – albeit slowly and gradually – once the Fed signals that it’s done with the current cycle of rates hikes. But for October, we’re more likely to see rates remain in the 7.0-7.5% range.”
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