Mortgage rates fell slightly. Is that good for homebuyers?
Mortgage rates fell slightly. Is that good for homebuyers?
If inflation slows down, and if the Federal Reserve eases off on its interest rate hikes, mortgage rates could fall further, said Charlie Dougherty, an economist at Wells Fargo.
“We’re actually expecting mortgage rates to gradually descend over the course of the next two years,” he said.
That could push more people into the housing market, which in theory would put upward pressure on prices.
“But I think the market would need to see sustained lower interest rates to see that kind of upward pressure,” said Odeta Kushi, an economist at First American, adding that mortgage rates made homes so unaffordable that home prices have started to fall.
“We can probably still expect prices to adjust downward to kind of the new reality of higher mortgage rates,” she said.
But, if prices go down, Greg McBride at Bankrate.com said that won’t make homes more affordable.
“As long as mortgage rates remain very high or we’ve got an economic environment that is less than inspiring for would-be homebuyers,” he said – because lower prices won’t always help if you’re not confident in the economy.
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