StellarQuest Real Estate - Lic # 02077900 www.StellarQuest.com Video By: Tim Hamilton Broker Associate Lic# 01959966 (714) 486-4086 [email protected]
Interest rates broke 7% on September 27th for the first time since 2002. This came days after the Federal Reserve hiked interest rates. This has been one of the sharpest rises in mortgage rates ever, and it has had a significant impact in slowing the housing market. In Orange County home prices are beginning to fall on a month-over-month basis and homes are starting to take a lot longer to sell. To know where the housing market is headed, it is extremely important to know where interest rates are expected to go.
We take a look at mortgage rate forecasts from Fannie Mae, the Mortgage Bankers Association, and Mark Zandi who is the chief economist of Moody's Analytics. Fannie Mae and the Mortgage Bankers Association are expecting interest rates will be lower throughout 2023 then they currently are today. Mark Zandi think rates could stay near current levels throughout the Spring season.
One of the reasons mortgage rates are higher than most economists expected is because of an unusually large spread between the 10 year treasury and 30 year fixed rate mortgage. Typically, the 30 year mortgage rate is about 2% higher than the 10 year treasury rate. Today it is about 3%. According to an article on Inman News, this is because of an increased risk of prepayment on the mortgages.
Below are a few interesting charts related to housing market values.
Chapters: 0:00 Mortgage Rates Spiked! 1:37 Fannie Mae Forecast 3:13 Mortgage Bankers Association Forecast 4:17 Mark Zandi on Mortgage Rates 5:32 10 Year Treasuries vs. 30 Year Fixed Rate Mortgage 7:30 Contact Me For These Forecasts!
