Mortgage Interest Rates Forecast

Taylor Getler
By Taylor Getler 
Edited by Mary Makarushka

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Mortgage rates this week

Mortgage rates fell in the week ending Nov. 22, for the third week in a row.

  • The 30-year fixed-rate mortgage averaged 7.26% APR, down 15 basis points from the previous week's average, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point.

  • The 15-year fixed-rate mortgage averaged 6.5% APR, down 17 basis points from the previous week's average.

  • The 5-year adjustable-rate mortgage averaged 8.06% APR, unchanged from the previous week's average.

Sales of existing homes continued their downward trajectory in October, with sales dropping 4.1% month over month and 14.6% year over year. Sales slumped in the Northeast, South and West, and remained relatively unchanged in the Midwest. Compared with a year ago, all four regions have seen declines in sales.

None of this is particularly surprising, considering that mortgage rates reached a 23-year high by crossing the 8% threshold last month. The median sale price for existing homes increased year over year for the fourth month in a row, jumping 3.4% to $391,800.

A Halloween home buyer would have seen an average interest rate of 7.78% APR. At that rate, a borrower purchasing a $391,800 home with a down payment of $31,500 (the median down payment in the second quarter of 2023, according to real estate analytics firm ATTOM) would have taken on a monthly principal-and-interest payment of $2,589. According to the Bureau of Labor Statistics, the average full-time worker brought home $4,472 a month in the third quarter of 2023. Assuming this matches our borrower’s salary, their mortgage payment would eat up 58% of their monthly take-home pay. This would leave $1,883 left for property taxes and insurance, food, transportation, child care, debts and other expenses.

"Multiple offers, however, are still occurring, especially on starter and mid-priced homes, even as price concessions are happening in the upper end of the market," said National Association of Realtors’ chief economist Lawrence Yun in the Nov. 21 existing home sales report.

The current environment continues to benefit sellers and homeowners, with Yun stating that “a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years."

If you’re planning to buy a home, consider using an affordability calculator while setting your budget. There are a host of costs that contribute to your monthly payment, and spending too much of your earnings on housing expenses can cause you to become house poor.

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November mortgage rates forecast

When mortgage rates cross a 23-year-old threshold, it makes you wonder if they'll keep rising. They might. But the more likely scenario is that they’ll plateau for much of November, although they could succumb to upward pressure after Thanksgiving.

What other forecasters say

Three prominent organizations have predicted that mortgage rates will be higher in the final three months of this year than they were in the previous three months. And all three — Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors — predict that mortgage rates will reach their peak in the fourth quarter of this year and drop throughout 2024.

As recently as August, all three organizations were predicting that mortgage rates wouldn't even hit 7% this year. Instead, rates reached 8%. Treat this current forecast with skepticism, too.

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