Oakland real estate broker Jamell Tousant and his colleagues are acutely aware of the impact of fluctuating interest rates. Interest rates are currently double what they were at the start of the year. These circumstances continue to prompt important questions surrounding the present real estate landscape.
Unfortunately, interest rates are unlikely to go down before the end of the year. Instead, various factors in today’s economic climate mean that they’re more likely to rise further. It’s the result of ongoing inflation, geopolitical tensions, and a potential recession.
With that, real estate interest rates will remain turbulent and generally trend upward well into 2023. But what about later next year? Seasoned real estate broker Jamell Tousant sets out to answer that question by taking a closer look at the matter.
Will Real Estate Interest Rates Go Down in 2023?
While interest rates are unlikely to fall in the coming weeks and months, there’s some good news on the horizon. Fast-forward to the end of next year, and things look more promising, real estate broker Jamell Tousant reports.
According to the expert, 30-year mortgage rates are anticipated to average close to nine percent over the coming 12 months. However, as 2023 draws to a close around a year from now, this figure is forecast to begin falling. It’s a situation likely to arise as target Federal Reserve Board funds start to trend in a more positive direction.
Analysts predict that, between now and the end of 2023, these funds could have risen by approximately 200 basis points from today’s levels. The result should be a small but welcome drop in mortgage rates. Regarding 30-year mortgage rates, Tousant believes this could translate into a reduction of around half of one percent.
A Welcome, Albeit Small, Drop in Mortgage Rates
Of course, a reduction of just 0.5 percent in mortgage rates is negligible. Yet, Jamell Tousant says it’s vital that people see the importance of even minor improvements. That’s because, after a period of rising interest rates, any reduction is always a good sign moving forward. In this instance, it bodes particularly well for 2024 onward.
Moreover, Tousant believes that things could improve further under the right conditions. Should the Federal Reserve Board manage to get inflation under control, the expert sees the potential for an additional reduction in interest rates later in 2023.
In the best-case scenario, the Northern California-based real estate broker points toward a late-2023 30-year mortgage rate of 5.5 to 6.5 percent. That’s compared to a potential interim high of over nine percent and, therefore, equivalent to a drop of up to four percent.
Two Decades of Real Estate Expertise
UCLA graduate Jamell Tousant is a licensed real estate broker and property consultant from the Bay Area of Northern California. Tousant first became involved in real estate in 2001 and has since closed over $250 million in real estate transactions.
Tousant is a member of the California Association of Realtors, the National Association of Realtors, and the National Commercial Real Estate Association. He also holds a Graduate Realtor title from the Graduate Realtor Institute, a designation maintained by the real estate broker since 2010.