The Adler Team Mortgage Rate Forecast  Jan. 9-13th 2023

Mortgage Interest Rate Prediction:

"Will rates go down in January 2023?"

Brought to you by The Mortgage Reports - Paul Centopani

Mortgage rate forecast for the week of January 9-13th: 😃

After declining through the end of 2022, interest rates grew for the second week in a row.

The average 30-year fixed rate mortgage rose from 6.42% on Dec. 29 to 6.48% on Jan. 5, according to Freddie Mac.

“Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of millennial renters will provide support to the purchase market. Moreover, if rates continue to decline, borrowers who purchased in the last year will have opportunities to refinance into lower rates,” said Freddie Mac Chief Economist Sam Khater.

Will mortgage rates go down in January? 👊🏠

Mortgage rates fluctuated greatly in 2022. The average 30-year fixed rate went as low as 3.22% on Jan. 6 and reached a high-water mark of 7.08% on Nov. 10, according to Freddie Mac.

The year’s big rate movements can be attributed largely to the Federal Reserve’s aggressive actions to help combat decades-high inflation. However, with inflation starting to cool, the Fed eased its foot off the gas in December and is expected to make smaller rate hikes in 2023.

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 Attom Data Solutions, First American, Zillow, and others weigh in on whether 30-year mortgage rates will climb, fall, or level off in January.

Here are 3 expert mortgage rate predictions for January:

1. Rates will moderate

“We’ve seen inflation numbers cooling off the past couple of months and mortgage rates responded by following that. As inflation continues to come down even more, that will help take some pressure off of mortgage rates. We’re not going to see as many rapid rate movements. We’ll likely see rates stabilizing and coast around the range they’re in now for the next couple of months.”

By: Nicole Bachaud, senior economist at Zillow

2. Rates will moderate

“Mortgage rates will probably be more or less flat for most of January, moving up or down within a fairly tight band — perhaps between 6.25% and 6.50% for a 30-year fixed-rate loan. Actions and comments by the Federal Reserve have generally been the cause of more rapid spikes and declines in mortgage rates recently, and the Fed isn’t scheduled to meet again until January 31st.

There is a consumer price index (CPI) report scheduled for Jan. 12, and any surprises — to either the upside or downside — regarding inflation numbers could cause a bigger movement in mortgage rates as well.”

By: Rick Sharga, EVP of market intelligence at Attom Data Solutions

3. Rates will moderate

“Mortgage rates will continue to face upward pressure until inflation convincingly cools. The Federal Reserve has made it clear that its stance will remain hawkish until inflation begins to approach its desired target of 2%. However, recession fears and any new data that suggests inflation is cooling may put some downward pressure on mortgage rates. The result of these push-and-pull factors may be a moderation in mortgage rates.”

By: Odeta Kushi, deputy chief economist at First American

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.

However, with inflation cooling, the Fed starting to slow its rate hikes, and the likelihood of a recession, many experts currently believe mortgage interest rates will descend or move within a tighter range compared to the spikes we saw earlier in 2022.

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