Originally featured June 27, 2023 on Love & Company
By Lauren Houlik, Director of Market Intelligence, and Rob Love, President/CEO
This is the third installment in Love & Company’s 2023 blog series on the health of the home resale market. Our February 7, 2023 article set the stage for this discussion with a deep analysis of six key performance indicators, including how changing trends from recent years may impact prospects’ willingness to sell their homes and make a move to senior living. This update focuses on what has changed in the market since our April 27, 2023 update and how these emerging trends may affect the senior living field. As needed, we refer back to the original article or the April update for full details on our ongoing analysis.
Mortgage Interest Rate Trends
In our original article, we noted that mortgage rates declined a bit during the summer of 2022, despite rising federal funds rates, before increasing sharply by late October. Since then, mortgage rates have fluctuated but remained fairly level, despite the federal funds rate increasing five times, from 3% in October to 5% by May 2023. Interest rates are now showing signs of increasing again, in the wake of the latest (May 4th) federal funds rate hike.
After peaking at more than 7% in October 2022, mortgage rates dropped to around 6.3% by the end of March 2023 and hovered there throughout April, before rising in May. Rates have been increasing weekly since May 11th, growing from 6.35% to 6.79% by June 1st. This is the highest interest rate in 2023 so far, and the highest since November 10, 2022 (7.08%).
The Federal Reserve will announce its next rate decision on June 14th, with many economists predicting no increase to the federal funds rate in June (perhaps in July). Depending on the Fed’s decision, we may see the beginning of a mortgage rate correction or continued increases, approaching peak levels from last October.
Continued on Love & Company. Read the full article here.