GRAND RAPIDS, Mich. — There are signs that inflation is improving. We learned Tuesday that consumer prices rose 7.1 percent in November, that was down from 7.7 percent in October and it's the 5th straight dip.
Wednesday the federal reserve will decide whether or not to continue raising interest rates and if so, by how much. So what does this mean for mortgage rates? We have the answer in today's 13 ON YOUR SIDE Money Guide.
We spoke with Zachary Tebos, a mortgage loan officer with Lake Michigan Credit Union Tuesday morning. He said the Consumer Price Index slowing is a sign that the fed raising rates is working to curb inflation, which is a good thing in the long term. He said it's very likely that if the fed increases interest rates on Wednesday, we will see mortgage rates go up again in the short term, but come down in the long term.
He says the by the end of 2023 mortgage rates are expected to dip to 5.4 percent. When we checked Tuesday they were at 6.125 percent for a 30-year.
While mortgage rates are currently higher than they were this spring, Zach is quick to point out that many homes were selling for far above the asking price.
He says in April homes were selling for, on average, $21,000 above list price. As of November they were selling for $2,000 under asking.
“Buyers are able to get into a house from a cheaper standpoint," explained Zach. "Obviously they do have the higher rate but it's never been more true what we say in my industry, 'marry the house, date the rate.' You can always refinance down to a lower rate when and if we see rates going down in 2023,” said Zach.
Zach says once we see inflation on a consistent downward trend mortgage rates will follow suit.
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