Mortgage rates in 2023 have become a roller coaster moving up and down within a matter of days. Many home buyers in are wondering where mortgage rates may be expected to go in April 2023 as the peak real estate season for 2023 spring picks up.
Several analysts of the financial and real estate world are predicting that mortgage rates will continue to ride the roller coaster throughout the month of April 2023. A majority of the time financial and real estate experts expect that rates will drop back down to around 6% and maybe even fall below 6% later in the year. These forecasts are built around the assumption that the Federal Reserve is going to continue to tame inflation and that the economy in the United States will slow down a bit.
Market factors that led to falling mortgage interest rates in March 2023
Information from Bankrate’s National Survey of Lenders showed that March welcomed an increase in mortgage interest rates. March started out with an average mortgage interest rate of 6.73% which took a slight increase to 6.84% the week ending of March 8. After this mortgage interest rates decreased, ending the month at 6.48% on March 29.
But why did mortgage rates start to decrease through March? Many experts attributed it to the bank failures especially the large banking crisis of the Silicon Valley Bank on March 10 which was followed by the failure of Signature Bank on March 12. These two bank failures were the second and third largest to ever happen in American history.
This large banking crisis led the Fed to increase interest rates by .25% at the March 22 meeting which was a much different plan from the .5 percentage point increase that they were forecasting. It does not dictate where mortgage interest rates will go but they play a huge part in influence.
How experts expect mortgage rates to go in April ’23
The main driving factor of where interest rates went over the course of the last year or so was the influence of inflation. It was also tied closely to how the Fed responded to rein in inflation.
Analysts say that inflation, the Federal Reserve’s next steps, and results in the banking sector will be the driving factors of where mortgage rates will land in the next few weeks. The banking crisis is seeming to steady out and fade away according to Bankrate’s chief financial analyst Greg McBride. He expects that mortgage rates will continue to follow the movement of inflation.
The Mortgage Bankers Association is predicting that mortgage rates are going to fall to 5.3% by the end of the year as the economy begins to weaken. Despite this prediction, the US economy is growing currently and this prediction may not hold true.
Some financial analysts are advising not to expect too much of a decline in mortgage interest rates as they believe the US economy has still held onto a solid footing. They believe it will cause inflation to have a slow decline which will also result in the Fed policy tightening which could leave mortgage rates in the same range they are at.
The overall general consensus for mortgage interest rates in April 2023 is they could decline but they could also see some increases as well.
How should buyers proceed with mortgage rate predictions?
Greg Kennedy, Calgary homes for sale real estate expert suggests, “many home buyers are concerned about their ability to secure an affordable mortgage interest rate and find a home that they truly want. Home prices are not taking huge price decreases and mortgage rates seem to be very unpredictable.”
Some potential buyers are watching interest rates closely and real estate experts say this could lead buyers to jump on making an offer quickly in order to lock in an ideal mortgage interest rate before it quickly changes.
The best way to purchase a home in the spring is to work with an expert local agent and a mortgage professional to help you determine your ideal homebuying budget no matter if rates increase or decrease by a few tenths of a percentage point.