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Andy Nolte, Ellen’s go-to loan officer from Fairway Mortgage, shares his forecast for mortgage interest rates in 2023.

Andy recognizes the Federal Reserve’s attempts to combat inflation by raising the federal funds rate. He notes this is sometimes incorrectly connected to an increase in mortgage rates. It in fact is a beneficial move since the mortgage bond market sees this as the Fed working to lower inflation. By looking at CPI (Consumer Price Index), we can see the current peak in conjunction with Fed’s fight to slow inflation as a good sign that mortgage rates will be settling down soon.

Currently, mortgage rates are high, but with the predicted trends showing a drop coming, Andy states that now is a good time to purchase a home for a few reasons. The competition has lessened and inventory has increased.

Utilizing a no-closing-cost refinance option in the future may be your best bet to get the home you want now. How this works is once rates go down your lender will pay your closing cost for the refinance and in return, you receive a higher mortgage rate with the understanding that you will be refinancing later again when rates go down more.

Wendy McDermott, Producing Branch Manager at Synergy One Lending, shares another option available to buyers and sellers:

“In the market we’re in, there are financing strategies to help both the seller and buyer together. One example would be a 2/1 buydown concession. Sellers and buyers can take advantage of the strong appraisal values we still have in our market.”

With a 2/1 buydown, the buyer’s interest rate is reduced by 2% for the first year and by 1% for the second year at a reasonable seller concession.

Watch the video below for Andy’s full 2023 mortgage rate prediction and feel free to call Andy at 816-309-8175 or Ellen at 816-489-6950 if you have any more questions!