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Mortgage rates have trended down over the past couple of weeks and will likely fall further throughout 2023 as inflation eases and the Federal Reserve slows its pace of hikes to the federal funds rate.
As rate drop, those who have been priced out of the market due to high mortgage rate and rising home prices may finally be able to re-enter the market and find a home that fits their budget. Likewise, those who got their mortgages when 30-year fixed rates were spiking above 7% will have an opportunity to refinance and put some extra cash back into their monthly budgets.
Today’s mortgage rates
Today’s refinance rates
Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly and long-term payments.
By plugging in different term lengths and interest rates, you’ll see how your monthly payment could change.
Mortgage rate projection for 2023
Mortgage rates started ticking up from historic lows in the second half of 2021 and increased over three percentage points in 2022.
But many forecasts expect rates to begin to fall this year. In their latest forecast, Fannie Mae researchers predicted that 30-year fixed rates will trend down throughout 2023 and 2024.
But whether mortgage rates will drop in 2023 hinges on if the Federal Reserve can get inflation under control.
In the last 12 months, the Consumer Price Index rose by 6.5%. This is a significant slowdown compared to where inflation was earlier this year, which is a sign that mortgage rates may start coming down soon as well.
If the Fed acts too aggressively and engineers a recession, mortgage rates could fall further than what current forecasts expect. But rates probably won’t drop to the historic lows borrowers enjoyed a few years ago.
Should I get a HELOC? Pros and cons
If you’re looking to tap into your home’s equity, a HELOC might be the best way to do so right now. Unlike a cash-out refinance, you won’t have to get a whole new mortgage with a new interest rate, and you’ll likely get a better rate than you would with a home equity loan.
But HELOCs don’t always make sense. It’s important to consider the pros and cons.
Only pay interest on what you borrow
Typically have lower rates than alternatives, including home equity loans, personal loans, and credit cards
If you have a lot of equity, you could potentially borrow more than you could get with a personal loan
Rates are variable, meaning your monthly payments could go up
Taking equity out of your home can be risky if property values decline or you default on the loan
Minimum withdrawal amount may be more than you want to borrow
PFI Bankrate Cashout RefWhen …read more
Source:: Business Insider