CHARLOTTE- First and foremost, Happy New Year and welcome to 2023. In anticipation of the New Year, we have spoken about FHA and conventional loan limits increasing, down payment assistance programs being available, the ability to purchase an investment property or second home and more! As the market adapts to inflation, the economy and more, so does lending. So of course, as we may be aware of, the main factor in 2022 was inflation.
As inflation was rising, the interest rates (as well as the Federal Reserve) began to increase their rates as well. The reasoning behind that, is because mortgages are set up on 10–30-year terms, and the bank has to determine the worth of the dollar over that entire time span. If the inflation is rising, the value of the dollar is decreasing, in which over time your interest payment will be worth less and less (hence why they would collect more – higher rates). In an inverse manner, if inflation is combatted, and there are signs of a stagnant dollar or even strengthening the dollar by deflation, then the rates go down. So as we step into 2023, it felt right to mention that inflation is beginning to show signs of being under control. This means, the rates have already fallen from the daunted 7’s, into the 6’s (even lower 6’s) and projections are showing signs of 5’s, even maybe 4’s once more!
The current data and projections lead to much optimism for current and prospective home buyers! If any questions arise, please do not hesitate to reach out firstname.lastname@example.org – (704) 430-6138. Happy New Year!