Home Prices Dip as Mortgage Rates Climb | The Neighborhood Minute May 2023

The Neighborhood Minute: Housing Prices Drop as Mortgage Rates Struggle to Find Solid Ground

Buying or Selling a Home? Read This First.

As we put the early part of 2023 behind us, it’s easy to see the housing market is fighting a tug-of-war battle among high inflation, steep interest rates and recession fears. Mortgage rates continue to fluctuate minimally, despite these uncertainties and the Federal Reserve’s recent hike in March.

If you’re buying or selling this year, keep scrolling for more on the state of fixed-rate mortgages, home prices and HELOC rates.

The Latest Mortgage Trend Report

Mortgage Interest Rate Forecast

• The current benchmark interest rate is 4.75%-5%.
• Current 30-year mortgage rates and 15-year fixed rates continue to fluctuate, but buyers with excellent credit could secure more competitive rates.
• After rates decreased in March, which was the first promising decrease in mortgage rates since early February, they saw a small increase in April.
• Experts predict stable market conditions with higher rates until later in the year.

House Prices Drop as HELOC Rates Remain Steady

• Home prices are starting to fall year over year for the first time in almost 11 years, but experts are uncertain if they’ll drop more this year.
• However, the cost of owning a home increased by almost 30% compared with one year ago due to rising rates.
• Recent moves by the Fed drove home equity line of credit (HELOC) interest rates up, but they have stabilized at around 7%-8%.
• The average 30-year fixed-rate mortgage and 15-year fixed-rate mortgage rates have increased, making adjustable-rate mortgages more attractive to buyers.

2¢ Worth of Wisdom Q: If I’m buying a home this year, should I go for an ARM? A: “The home loan you choose should always be based on your personal circumstances and budget. But if you’re researching ARMs (adjustable-rate mortgages), one thing to think about is how long you plan to live in a home. A 15/1 ARM is becoming popular because it offers a lower, fixed rate for the first 15 years, which might be a consideration if you plan to move or refinance within that time frame.” —Ed Hensley, Executive Vice President & Manager, Residential Lending

 

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Tools, Tips and Advice

Home Equity Lines of Credit

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WesBanco Adjustable-Rate Mortgages

Discover the potential for lower payments and savings opportunities.

WesBanco Fixed-Rate Mortgages

Find flexibility, peace of mind and competitive interest rates.

*All information cited can be found on housingwire.com.