Well, this is fun…we watched mortgage rates improve quite drastically last week due to surprisingly optimistic inflation data. In fact, according to the weekly mortgage rate survey published by Freddie Mac, the average rate for a 30-year fixed mortgage fell by .47 percent.
As we head into the long Thanksgiving Holiday weekend, I expect mortgage rates to remain rather steady (barring any major surprises) for the remaining business days of the week, which are among some of the slowest trading days of the year.
And since there’s not a whole lot of economic data coming out this week, I thought I’d share some very interesting economic forecast discussions I’ve been seeing and how you could benefit. First, Freddie Mac – the government-sponsored enterprise that provides mortgage capital to lenders – released its economic projections, and the most important points in the forecast were:
• Negative GDP is expected for Q4 2022 to kick off a modest recession for Q1 2023
• 2022 GDP is expected to end up at 0 percent growth for the year
• 2023 GDP is expected to hit 0.6 percent
• 2024 GDP is expected to rebound to 2.0 percent
• For 2024 they predict single-family home sales to rebound by 18.6 percent
How can you benefit from these projections? Well, firstly, if you are planning to buy, analysts that I follow are predicting rates to improve during the first half of 2023. If that happens, those buyers that have been on the sidelines are likely to step into the market, increasing competition for already tight inventory.
Yes, rates are higher now than in the recent past, but we have options to improve your rate with various options, such as rate buydowns that could reduce the rate you pay by 2 percent and 1 percent. Then we plan to refinance your mortgage when rates improve. It may be smart to consider buying now so that you’ll have less competition and when the buyers rush back into the market driving up home values, you’ll be on the receiving end of increasing appreciation.
As for what else I’m watching this week, new home sales, which have declined the last three months in a row, are expected to come in at a 574,000 annualized rate, a little lower than in October versus 603,000 in September.
Finally, I want to wish you and yours a Happy Thanksgiving! I’m grateful for you and honored to have you as part of this community.