[August 2023]
1 minute speech
Title : Interest Rate Projection for the rest of 2023 | Mortgage Minute
Link : https://youtu.be/f3Sr7qtwXkw
1. Key words
Interest rates, Uncertainty, Online opinions, Unify, 2023 high, Debt ceiling issues, Shifts, Slightly, declining, Predictions, Fannie Mae, 6.4% average, Q2 2023, National Association of Realtors
2. Summary
In "The Mortgage Minute," Ryan Skaggs addresses the uncertainty around interest rates. Amid diverse opinions online, he aims to unify perspectives. Interest rates, at their 2023 high, were affected by debt ceiling issues. Recent shifts show rates slightly declining. Predictions vary; Fannie Mae expects a 6.4% average for Q2 2023. National Association of Realtors foresees 6% this year, 5.6% in 2024. Bank of America predicts 5.25% by year-end. Rate volatility due to debt ceiling negotiations is acknowledged. The consensus leans towards rates lowering in summer and fall. Skaggs emphasizes acting now over waiting due to market dynamics.
3. Script
Where are rates going? The internet is full of different opinions. We're going to bring them all onto one screen here into one narrative and talk about that next.
Hey there, my name is Ryan Skaggs, and this is "The Mortgage Minute." This channel is dedicated to everything mortgage, real estate, and interest rates. And we're going to start with those interest rates.
It is now June 2023, five months in. We're at the high point of interest rates of what we've seen so far in 2023. Over the last month, we've seen that essentially been that narrative been pushed by this debt ceiling issues that is hopefully being solved here soon. Looks like we're going from the house to the Senate. If you're watching this later on, hopefully it's approved and all is well. But I'll tell you this, from what I'm seeing in my business over the last week, we've really seen a nice change of pace in interest rates. Instead of that steady rise, now we're starting to see those rates come back down.
The average 30-year fix, according to Freddie Mac, and I'll put that link below, is 6.79. According to Freddie Mac, again, our all-time high is 7.08. When I say all time, I mean within the 20 years or so. So when we see 7.08 in October, November, this year, this is our absolute high, 6.79. So we're starting to approach that. But I'll tell you just in the last few days we are starting to see those rates move back down.
Now the topic of today is where rates are going. So, I would love to hear from you. Where do you think interest rates end at the end of 2023, going to 2024? Where do you think they're gonna be? Are they going to start with a five, a six, a seven? A couple of weeks ago, I did a video that rates could go to eight if we don't get this debt ceiling. There's a really interesting article that made a hypothesis for what we could potentially see if they didn't come to grasp with this debt ceiling issues. So where do you think they're gonna go? I'd love to hear and see what your comment below. I'm coming back around at the end of the year, and I'm gonna check this out and see who's right. I'll send you something cool, I promise.
But with that said, let me just start reading a few of the articles and information that I've pulled together here for this topic today. Fannie Mae 30-year fixed-rate mortgage will average 6.4 percent for this second quarter of 2023. So they already think we're going lower right now. National Association of Realtors, they believe the 30-year fix will progressively fall into 6.0 percent this year and 5.6 in 2024. So they've got us kind of in that mid-fives in 2024 and 6 flat. We've got Bank of America's head of retail lending. They're projecting mortgage rates to fall to 5.25 by the end of the year. That would be so wonderful, 5.25 at the end of the year. A Zillow home loan senior macro economist. A fight over raising the debt ceiling was likely to drag into summer, and mortgage borrowers should expect rate volatility as a result.
That is 100% true. We are seeing that. I'm seeing that every day, this volatility, where we're having well, previously, we had a lot of bad days and one good day. Now we're starting to see a lot of good days where rates are coming back down, and then just a few bad ones. Mortgage Bankers Association. This is the one that I watch a lot too. Our forecast is for the 30-year mortgage rate to be closer to about 5.5 by the end of this year and drop a little lower next year, quote unquote. That's from their Chief Economist, Michael Fratantoni. So where do we see rates going? We definitely have a hypothesis from a lot of smart people here that we're gonna potentially see them a bit lower here over summer into fall.
Now one question that I get asked a lot, just got asked this actually twice this week already, is why don't I just wait until those rates move down? So, I want you to think about this, and this is your opinion, and again, I'd love to hear your comments below, see if you agree with me on this. I contend if there are 10 houses out there and there's maybe 15 buyers, meaning there are more buyers than sellers... ...current we were low on inventory maybe there's closer to 20 buyers to 10 houses but whatever so let's call it 15 buyers 10 houses as rates move down people that had lower rates that are currently not in the market they're maybe sitting at three percent on their 30-year fix they're a little bit of handcuffed right now in terms of not wanting to move or do anything are likely going to come into the market because they had that extra kid they need an extra at-home workspace their job is now full remote maybe or maybe hybrid remote um you know prior to the pandemic if they were uh you know had the same home before or say you bought the home prior to the pandemic then you know this home potentially lives a lot different than maybe just two or three years ago on this kind of New work-life Balance that we have going so with that said that house isn't going to change so those people are at three and now they can lock in something in the fives that could get them off the couch and out there at an open house buying a house so now all of a sudden I would contend instead of 15 buyers maybe we have 25 buyers but we probably haven't solved the inventory issues we don't have a lot of new construction