Is a 7% mortgage rate the ‘new normal’?

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Should home buyers get used to the idea of a 7% mortgage rate?

According to a recent article from U.S. News & World Report, home buyers may have to get comfortable with having a mortgage rate that starts with a ‘7’ instead of a ‘6’ or lower. Mortgage rates started the week up across the board with a 30-year fixed mortgage rate continuing to creep closer to 7%.

The article contained several quotes from Lawrence Yun, the chief economist at the National Association of Realtors. Yun stated the following, “The 7% interest rate could be the new normal,” when asked about where he saw interest rates heading.

With the Federal Reserve expected to continue to hike interest rates, locking in a rate in the six-percent-range is likely the only way to get a mortgage rate under 7% for a while.

Where is the housing market headed in 2023?

Zillow has a detailed report with a 2023 housing market forecast included. Zillow made a bold call in February of 2022. They predicted that home sales would rise by 17.8% over the next year. Home prices did surge for most of 2022, but Zillow has been cutting their predictions since. Their revised home price forecast in September of 2022 was only a 1.2% increase for the next 12 months. They finally stopped slashing this month, and have indicated that they expect home prices to pick up again.

Most economists predict that home prices will drop in 2023, but Zillow’s forecast is one that home buyers and potential sellers should keep an eye on.

How about the global real estate market?

The current global real estate market is worth about $11.4 trillion. That’s expected to reach $30.6 trillion in 2030. Yahoo Finance looked into the trend, and concluded that the best way to get in on a booming real estate market is to buy rental properties. In particular, multi-unit buildings is their key to building wealth, and detailed several tips on how to plan and manage a property with multiple units.

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