After another rate increase last week, the Federal Reserve chair signaled a potential pause in hikes, causing a slight dip in mortgage rates. Economists are expecting rates to gradually decline throughout the remainder of 2023 and into 2024, and long-delayed homebuyers are rejoicing, Realtor.com reports.
The monthly Fannie Mae Home Purchase Sentiment Index rose in April to its highest level since May 2022, with 22% of consumers saying they expect rates to go down, compared with just 12% last month. In addition, the share of respondents who said now is a good time to buy a home rose to 23% in April from 20% the previous month.
People believe mortgage rates will fall over the next year, which “could be due to a combination of factors,” [Doug] Duncan said, “including an awareness of decelerating inflation, market suggestions that monetary conditions will ease in the not-too-distant future, and, of course, actual mortgage rate declines during the month.”
But would-be buyers are still frustrated by how expensive it is to buy a home. Many respondents said they expect home prices to go up in the next 12 months. The share of those who believe in rising home prices was 37% in April, up from 32% the previous month.
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