Interest Rate Update

Efficient Funding in Bridgeport

U.S. Mortgage Rate Update for March 2023:

The Economy Continues To Outperform!

Freddie Mac chief economist Sam Khater expects a quarter-point increase from the Fed this month. He sees uncertainty not in the size of the next increase but in how long rates stay high. The central bank could feel compelled to keep rates at elevated levels for a while, just to make sure inflation truly has been squeezed out of an economy that has proven resilient to rate hikes as it continues to outperform.

Another quarter-point rate hike is likely in March, though another blowout jobs report or evidence of inflation re-acceleration would prompt the Fed to raise rates by one-half percentage point. Under the quarter-point scenario, mortgage rates won’t respond to the rate hike itself but rather to the Fed’s assessment of how high rates will go. With inflation elevated and the end point of Fed rate hikes still in question, the risk is to the upside on mortgage rates.

The Fed will likely raise interest rates by 50 basis points in March 2023, However, when it comes to the rate hike itself, the impact on mortgage rates will be minimal. Mortgage rates are currently moving upwards due to strong economic data and inflation running above expectations.

The NAR expects 30-year mortgage rates to remain in the 6.7 percent range through March – but then fall to 5.6 percent by the end of 2023.

Did You Know?

The highest mortgage rate in US history was 18.45%. The highest rates hit in October 1981, when interest rates on 30-year fixed loans reached a sky-high 18.45%.

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