2023 Mortgage Rates Surge Closer to 7%: What Homebuyers Need to Know

2023 Mortgage Rates Surge

2023 Mortgage rates surge has continued to climb, and the average 30-year fixed-rate mortgage is now at 6.50%, according to Freddie Mac. This marks an increase of 41 basis points this month, due to rising inflation rates. The sharp uptick in rates has resulted in shrinking homebuyer demand, as would-be buyers are forced to either lower their budgets or abandon their purchasing plans.

2023 Mortgage Rates Surge
2023 Mortgage Rates Surge! (Photo: Kiplinger)

Mortgage Rates Continue To Increase

As mortgage rates continue to increase, more buyers are choosing to walk away from their purchase plans, and the volume of mortgage applications for purchase has decreased significantly. The purchase application volume is down 41% from a year ago and is currently at its lowest since 1995.

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However, this pullback in demand also presents an opportunity for homebuyers to negotiate a good deal, as sellers are pulling back their incentives ahead of the spring selling season. At least 31% of builders reduced home prices in February, and buyer incentives are also becoming more limited. This means the window of opportunity for some homebuyers to snag a good deal may end soon.

Homebuyers Need To Act Quickly

Homebuyers must act quickly and negotiate a good deal on their dream home. With home prices decreasing in some areas, and the possibility of negotiating incentives still available now may be the perfect time to enter the market. However, with mortgage rates continuing to surge, it is important to keep affordability in mind and to work with a trusted lender to find the right mortgage for your needs.

READ ALSO: Mortgage Rates Continue To Fall Providing Relief For Homebuyers And Refinancers