Mortgage rates have been on an upward march in 2022: while in January 30-year fixed mortgage rates were just above 3%, recently they have been hovering above 5%. (You can see the lowest mortgage rates you could qualify for here.) That means many buyers are wondering: where will mortgage rates go this summer? And while no one has a crystal ball, we asked real estate experts and economists to share their predictions for where mortgage rates will land in June.
Zillow economist Nicole Bachaud says, “Rates are above 5% and should stay around that level for the rest of the year.” Realtor.com chief economist Danielle Hale says she expects mortgage rates to hover between 5.25% and 5.5%, and Kate Wood, real estate expert at Nerdwallet, says that t looks like mortgage rates should stay stable in June. But, of course, these predictions depend on a number of things.
Greg McBride, chief financial analyst at Bankrate, says there is risk of a rate hike: “Until we see lasting evidence that inflation has peaked – and that is not the case – the risk for mortgage rates remains on the upside. If inflation does not improve, but does not worsen, mortgage rates will hold. (You can see the lowest mortgage rates you could qualify for here.)
And as Hale says, “At this point in the business cycle, incoming data will cause rate swings and good news will be bad for interest rates in general and mortgage rates in particular. By this I mean that stronger economic data suggests that the Fed may need to take a tougher stance against inflation and drive mortgage rates higher.
For his part, Wood says it looks like mortgage rates could be stabilizing, with the Federal Reserve expected to raise rates again at its June meeting to help tame inflation, things could change: “An unexpected move of the Federal Reserve could be a card.”
Ultimately, where rates go from here really comes down to inflation and whether or not the market continues to settle at those rate levels, says Robert Heck, vice -president of online mortgage market Morty Morty. “If inflation spirals out of control and prompts the Fed to take even more aggressive action, rates could reach a level that could send demand and affordability into a steeper downward spiral than the decline we are seeing now,” he said. said Heck. (You can see the lowest mortgage rates you could qualify for here.)
However, don’t expect things to change immediately after the June meeting. “The Federal Reserve will begin the process of closing its balance sheet in June, which has been communicated and is widely expected, so this will not result in a sea of change overnight, but the cumulative effect of the Fed pulling Tens of billions of cash flowing out of the system each month will eventually have an economic impact, just as it did in 2019,” McBride says.
That said, weak signs are starting to appear that the market is rebalancing. “The share of announcements with a price drop is increasing, perhaps a sign that sellers cannot be as ambitious in their pricing strategy as they could have been in recent months,” says Bachaud. The key numbers to watch at this point are the early June jobs report, which is a good indicator of overall economic health. “A continued low unemployment rate, coupled with job and wage gains, will likely keep mortgage rates on an upward trajectory, but mean households will experience income growth that will support housing demand,” Hale said. .