{"id":32665,"date":"2023-06-08T07:27:51","date_gmt":"2023-06-08T14:27:51","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=32665"},"modified":"2026-04-13T07:14:36","modified_gmt":"2026-04-13T14:14:36","slug":"buyer-when-will-mortgage-rates-go-down","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-when-will-mortgage-rates-go-down\/","title":{"rendered":"When Will Mortgage Rates Go Down? It’s Hard to Say, But Housing Experts Weigh In"},"content":{"rendered":"

The U.S. housing market is undergoing a rebalancing. Visit\u00a0HomeLight’s 2023 Housing Trends Hub<\/a>\u00a0for information on how to navigate a shifting market \u2014 whether you’re a seller, buyer, or homeowner.<\/em><\/p>\n

With mortgage interest rates in flux and trending upward<\/a> after nearly two years of rock-bottom<\/a> percentages, prospective homebuyers across the country are wondering when mortgage rates will go down again.<\/p>\n

While no one can predict these kinds of things with absolute certainty, understanding how mortgage rates work<\/a> \u2014 including the factors that drive these numbers in the first place \u2014 can lend valuable context clues. We\u2019ll get into more details shortly, but it is safe to say that market activity is to blame (or thank!) for mortgage interest rates at any given time.<\/p>\n\n\n\n\n\n

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Looking to buy a home, but need some help navigating the market? Now is still a great time to buy, work with an expert real estate agent to help you find your dream home.<\/p>\n \n

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To help with our predictions of when mortgage rates will go down, we\u2019ve researched the state of the housing market<\/a> and spoken with two experts: Richie Helali of HomeLight Home Loans<\/a> and Newport News, Virginia<\/a>-based top real estate agent Leanne Hester<\/a>. We\u2019ll hear their insights as to what all of this means for buyers and why \u2014 spoiler alert \u2014 you should still go ahead and buy a home if you\u2019re ready.<\/p>\n

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Mortgage rates in early 2023<\/h2>\n

We\u2019re (somehow) almost halfway through 2023, which has given interest rates plenty of time to adjust as the world eases back into normalcy following the worst of the Covid-19 pandemic.<\/p>\n

We started 2023<\/a> with an average rate of 6.48% on a 30-year fixed rate mortgage as of January 5th, saw a significant bump up to 6.73% as of March 9th, then rates scooted up to 6.79% by June 1.<\/p>\n

Historically, rates are still pretty great \u2014 Helali recalls his father reminiscing about an 18% interest rate on his first home purchase in the late 1970s. However, 6.79% is still significantly higher than the 5.09% mortgage rate we were at one year ago at the start of June 2022. You\u2019re definitely not alone if you\u2019re wondering which direction rates are likely to head next.<\/p>\n

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Why did mortgage rates rise?<\/h2>\n

Interest rates adjust based on how the overall market is doing. Are consumers spending money? Are they buying things, investing in businesses, or otherwise making large purchases?<\/p>\n

When consumers slow their spending \u2014 as we saw happen at the onset of the Covid-19 pandemic \u2014 the Federal Reserve System<\/a> takes action to entice people back into making decisions that will help stimulate the economy. Lowering interest rates on mortgages is one of these clever moves.<\/p>\n

Conversely, when consumers have been spending too<\/i> much<\/i> money, or when demand has exceeded supply and folks are willing to pay more for goods than they usually would \u2014 as supply chains<\/a> try to recover from shipping interruptions and labor loss \u2014 we run into the problem of inflation. And to combat inflation, the Fed steps in to raise interest rates to try to curb unfettered spending.<\/p>\n

There\u2019s more to mortgage rates than the Fed\u2019s reactions to public spending habits, of course, but this is pretty much where it all starts. The International Monetary Fund has a great explainer<\/a> on these market ups and downs if you\u2019re up for some further reading.<\/p>\n

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How are housing market predictions made?<\/h2>\n

It\u2019s probably no surprise that housing market<\/a> predictions fluctuate based on what the greater economy is doing \u2014 but experts also make their calls by analyzing cold, hard data.<\/p>\n

The National Association of Realtors\u00ae (NAR) reported in late May 2023<\/a> that \u201cwith inflation easing further and the Federal Reserve expected to pause its rate hikes soon, mortgage rates will stabilize near 6% in the second half of the year.\u201d They have also shared that the average homebuyer can afford a $380,000 home, and roughly 45% of the homes currently on the market are within this price range.<\/p>\n

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So, when will mortgage rates go down?<\/h2>\n

Realistically, mortgage rates probably aren\u2019t going to experience a significant drop<\/a> anytime soon.<\/p>\n

\u201cThis year has brought inflation, so rates had to go up. If this leads into recession, then rates are going to go down again,\u201d says Helali. \u201cWill they go down to the same levels we saw in 2020 and 2021? Probably not. Rates may not go that low again for the foreseeable future.\u201d<\/p>\n

Backing Helali\u2019s prediction is the Mortgage Bankers Association, which forecasts interest rates<\/a> in the high-4% range at least through 2024.<\/p>\n

But if you\u2019re feeling like you may have missed out by not scrambling for a new mortgage<\/a> during the height of the pandemic \u2014 you haven\u2019t. According to Helali, these higher rates are actually more helpful for everyone.<\/p>\n

\u201cWhat these rates are going to do is help everybody find a house,\u201d he says, referring to how the market has been solidly in favor of sellers<\/a>, with limited homes available because so many folks have been vying to buy. Higher mortgage rates will lead to fewer buyers competing for homes, and sellers won\u2019t have as much leverage to command high prices or sell without making home repairs that prospective buyers might otherwise request as part of the deal. But this shift won\u2019t mean that people stop buying homes, it just means there will be more balance in the real estate market.<\/p>\n

\u201cRegardless of market conditions, there are still going to be people who are looking to purchase,\u201d Helali says.<\/p>\n

\n Mortgage rates are affecting buyers, but I wouldn\u2019t say that rates are keeping them from buying homes. I think the lack of inventory is keeping them from buying homes right now.<\/q>\n
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