As most hopeful Walnut Creek homebuyers are aware, the Federal Reserve took bold action to reduce inflation resulting in a rapid climb in mortgage interest rates. Rates increased rapidly from all-time lows in 2021 and peaked at just over 7% in September 2022. The change in rates served as a blow to potential buyers as their purchasing power took a decisive hit. Many buyers hit the pause button on their home search and have been in the wings, waiting for rate improvements.
Well, the market is looking more inviting for buyers! Inflation has eased and mortgage rates have dipped to their lowest level since the fall. And buyers are back!
Sam Khater, Chief Economist at Freddie Mac:
“Inflationary pressures are easing and should lead to lower mortgage rates in 2023.”
This prediction is excellent news if you are eager to get back into the Walnut Creek housing market because the boost in purchasing power lowers your monthly mortgage payment on a new home. These lower forecasted rates may be just what you need to make your home-buying dreams a reality.
But there is a word of caution: Don’t wait for rates to drop to 2021 levels or you will be waiting for a very, very long time.
Greg McBride, Chief Financial Analyst at Bankrate, explains:
“I think we could be surprised at how much mortgage rates pull back this year. But we’re not going back to 3 percent anytime soon, because inflation is not going back to 2 percent anytime soon.”
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What have we learned?
The combination of lower mortgage rates and less competition for homes may be just the recipe that buyers need for success. It’s important to keep in mind that 3% interest rates were a response to a worldwide pandemic and a return to those rates anytime soon seems unlikely.
Call me now, your Walnut Creek Realtor, to examine the options in the market and learn how today’s rates may affect your goals. Let’s get started. 925-200-2126