Mortgage rates will fall to 4.5% in 2023? That's the estimate from Fannie Mae. Here’s what that means for homebuyers

cnbc.com:

Mortgage rates are projected to decline next year — but that doesn't mean prospective homebuyers should necessarily delay a purchase for the prospect of lower financing costs.

The rate on a 30-year fixed mortgage will fall to an average 4.5% in 2023, according to a recent housing forecast published by Fannie Mae, a government-sponsored lender.

That dynamic would offer relief to would-be homebuyers who've seen mortgage rates balloon this year.

The Federal Reserve started increasing its benchmark interest rate in March to tame stubbornly high inflation, which has resulted in higher borrowing costs for consumers — who may feel a sense of whiplash from 2020, when rates bottomed out near historically low levels.

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Average rates are expected to be 4.7% and 4.4% in the first and fourth quarters of 2023, respectively — down from 5.2% in Q2 this year, according to Fannie Mae.

Still, consumers should «take forecasts with a grain of salt,» according to Keith Gumbinger, vice president of HSH, a market research firm.

«If you're participating in the marketplace, interest rates are important but might not be the most important component,» Gumbinger said.

Rates for a 30-year fixed mortgage — the interest rate of which doesn't change over the loan's term — have jumped more than two percentage points since the beginning of 2022.

Rates averaged 5.55% the week of June 23, according to data from Freddie Mac, another government-sponsored entity. That's up significantly from 3.22% the first week of January though a slight decline from the 5.81%