When you’re buying your first home, it can be hard to secure a conventional mortgage due to your financial situation. Many first-time buyers have a hard time meeting conventional mortgage requirements, which is why they pursue FHA loans instead. But right now, FHA mortgage rates are sitting at about 7% which is higher than they’ve been in the past couple of years.
Prospective buyers are eager to know if this trend will continue. What will FHA mortgage rates look like in 2023? Below, we’ve discussed the matter in detail.
Historical Look at Mortgage Rates
Before we go any further, let’s talk about changes in mortgage rates over the years. It may seem like a mortgage rate of 7% is a high number, but when you look at it from a historical perspective, it’s actually more of an average figure.
Rates today may be higher than they were two years ago, but they’re still a far cry from the rates we saw in 1981, which reached 18.5%. Up until the early 2000s, it was not uncommon to have a mortgage rate above 7%. So what we’re seeing right now is actually normal.
This is not to say that mortgage rates don’t matter, because they certainly do. Even a 1-2% difference in interest can have a big impact and save borrowers thousands of dollars over the years and result in a lower monthly payment. So it’s still important to be on the lookout for changes in the market.
Will FHA Mortgage Rates Change in 2023?
Getting back to our original point, many prospective homeowners are curious to know what FHA mortgages will look like in 2023. If rates are predicted to go up, buyers will want to take advantage of today’s rates while they can. Conversely, if they’re expected to drop, it may be a good idea to hold off for a while.
Unfortunately, there’s no cut-and-dry answer to this question. There’s no way to predict the future. And interestingly, opinions are rather divided on the matter.
Some experts are saying that if inflation continues to take its toll, rates may keep going up. In this case, it’s possible that they could reach 8 or 9%.
Others are saying that mortgage rates are likely to fall in the coming year. Fannie Mae recently published a housing forecast that stated they expect rates for 30-year fixed mortgages to fall to about 4.5%.
In the end, only time will tell. Buyers will simply have to make their best judgment call and go forward. The good news is, if rates fall, you may be able to refinance your mortgage in the future, so long as you meet the necessary requirements.
Chat with an Expert
If you have questions about FHA mortgage rates, please do not hesitate to reach out for help. One of our experts will be happy to chat with you and discuss your concerns in detail.
