Will Rates Go Down in December 2023? | Rates Forecast

November 22, 2023 - 16 min read

Mortgage rate forecast for next week (Nov. 27-Dec. 1)

Mortgage interest rates fell for the fourth week in a row.

The average 30-year fixed rate mortgage (FRM) decreased from 7.44% on Nov. 16 to 7.29% on Nov. 22, according to Freddie Mac.

“In recent weeks, rates have dropped by half a percent, but potential homebuyers continue to hold out for lower rates and more inventory. This dynamic is reflected in the latest data showing that existing home sales have fallen to a thirteen-year low,” said Sam Khater, Freddie Mac’s Chief Economist.

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Will mortgage rates go down in December?

Mortgage rates fluctuated significantly to open 2023 and mostly trended upward to start the second half. The average 30-year fixed rate went as low as 6.09% on Feb. 2 and climbed up to 7.79% on Oct. 26, according to Freddie Mac.

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The range can be largely attributed to the Federal Reserve’s ongoing fight against inflation, juxtaposed with uncertainty in the banking sector sparked by Silicon Valley Bank’s collapse. However, with duress permeating the financial market and the fallout from U.S. debt ceiling talks, the Fed may continue making hikes to bring interest rates down.

With the economy likely heading into a recession, it’s possible we’ve already seen the peak of this rate cycle. Of course, interest rates are notoriously volatile and could tick back up on any given week.

Experts from CoreLogic, First American, Home Qualified, and others weigh in on whether 30-year mortgage rates will climb, fall, or level off in December.

Expert mortgage rate predictions for December

Craig Berry, branch manager at Acopia Home Loans

Prediction: Rates will moderate

“Although rates have seen some downward movement recently, the unusually high gap between the 30-year fixed rate and the yield on the 10-year Treasury bonds has thwarted most of the positive gains. As the Feds are expected to leave interest rates alone through the remainder of 2023, we shouldn’t see much in terms of mortgage rate movement through the end of the year.”

Molly Boesel, principal economist at CoreLogic

Prediction: Rates will moderate

“While there was encouraging news on inflation last month which allowed the Federal Reserve to hold on interest rates, the landscape remains one where inflation will be their primary concern. This means that mortgage rates are poised to remain high, and near their current rate in December 2023. As inflation eases in 2024, expect mortgage rates to follow suit and start to decrease.”

Ralph DiBugnara, president at Home Qualified

Prediction: Rates will fall

“It looks like we have had the first major shift downwards for rates in a while. In October, U.S. payrolls came in lower than anticipated, which is a good sign that inflation may have reached its peak and could trigger a lowering of rates. I expect the Fed to stay neutral for the remainder of the year with any rate cuts coming in the first quarter of 2024. For December I believe the average 30-year fixed rate will land at 7.65% and the 15-year fixed will be 6.99%.”

Danielle Hale, chief economist at Realtor.com

Prediction: Rates will fall

“Mortgage rates are positioned to decline in November, and the streak may continue into December if the next few inflation readings come in as expected. Already, longer-term rates on bonds like the 10-year treasury have begun to decline in anticipation of the possibility that the Fed has done enough to cool the economy and tame inflation. Mortgage rates are likely to follow suit.

Following its November meeting, Chair Powell noted that the Fed is “not yet confident” that its monetary policy stance is sufficiently restrictive to bring inflation back to the 2% target. In so describing the Committee’s thinking, the possibility that the policy rate is high enough to bring about target inflation is on the table. Fed rate cuts are not yet in the picture, but they don’t need to be in order to see longer-term rates decline. Recent momentum has been positive, and as long inflation is cooperative, home shoppers appear to be on the receiving end of a bit of an early holiday gift.”

Jess Kennedy, COO at Beeline

Prediction: Rates will moderate

“The Fed’s second pause in November was expected and very welcome. The 10-year Treasury yield dipped with the announcement and that’s very welcome too. It’s starting to rise again already though and the spread between the 30-year fixed mortgage rate and 10-year remains large with nothing to indicate that gap closing soon. There is some sentiment that the economy is weakening, like slower-than-expected hiring and wage growth slippage based on October job numbers. With all this in mind, we expect rates to stay steady or slightly dip in December.”

Odeta Kushi, deputy chief economist at First American

Prediction: Rates will moderate

“Data that indicates inflation continues to decelerate and the labor market continues to cool may help mortgage rates stabilize in December. Additionally, the FOMC is expected to release their projections in the December FOMC meeting. If the Fed doesn’t hike rates in December and their inflation expectations and dot plot projections imply a more dovish Fed, mortgage rates may move down.

Yet, the opposite scenario – a Fed rate hike and more hawkish Fed – can’t be ruled out. Even so, it’s unlikely that we will see a meaningful decline in mortgage rates until inflation makes significant and sustained progress towards the Fed’s 2 percent target or there’s a decline in economic activity.”

Mortgage interest rates forecast next 90 days

As inflation ran rampant in 2022, the Federal Reserve took action to bring it down and that led to big interest rate growth. The average 30-year fixed-rate mortgage more than doubled within the course of the year.

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With inflation gradually cooling, the size of the Fed’s rate hikes are coming down. Additionally, the likelihood of a recession has many experts believing mortgage interest rates will move within a tighter range compared to the spikes we saw in early 2022.

Of course, rates could rise on any given week or if another global event causes widespread uncertainty in the economy.

Mortgage rate predictions for 2023

The 30-year fixed-rate mortgage averaged 7.29% as of Nov. 22, according to Freddie Mac. Two of five major housing authorities we looked at projected 2023’s fourth quarter average to finish below that.

The National Association of Home Builders sits at the low end of the group, predicting the average 30-year fixed interest rate to settle at 6.89% for Q4. Meanwhile, the National Association of Realtors had the highest forecast of 7.8%.

Housing Authority30-Year Mortgage Rate Forecast (Q4 2023)
National Association of Home Builders6.89%
Mortgage Bankers Association7.20%
Fannie Mae7.30%
Wells Fargo7.30%
National Association of Realtors7.80%
Average Prediction7.30%

Mortgage rates came down for the fourth consecutive week.

The average 30-year fixed rate declined from 7.44% on Nov. 16 to 7.29% on Nov. 22. The average 15-year fixed mortgage rate similarly dropped from 6.76% to 6.67%.

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MonthAverage 30-Year Fixed Rate
October 20226.90%
November 20226.81%
December 20226.36%
January 20236.27%
February 20236.26%
March 20236.54%
April 20236.34%
May 20236.43%
June 20236.71%
July 20236.84%
August 20237.07%
September 20237.20%
October 20237.62%

Source: Freddie Mac

After hitting record-low territory in 2020 and 2021, mortgage rates climbed to a 23-year high in 2023. Many experts and industry authorities believe they will follow a downward trajectory into 2024. Whatever happens, interest rates are still below historical averages.

Dating back to April 1971, the fixed 30-year interest rate averaged around 7.8%, according to Freddie Mac. So if you haven’t locked a rate yet, don’t lose too much sleep over it. You can still get a good deal, historically speaking — especially if you’re a borrower with strong credit.

Just make sure you shop around to find the best lender and lowest rate for your unique situation.

Many mortgage shoppers don’t realize there are different types of rates in today’s mortgage market. But this knowledge can help home buyers and refinancing households find the best value for their situation.

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Which mortgage loan is best?

The best mortgage for you depends on your financial situation and your goals.

For instance, if you want to buy a high-priced home and you have great credit, a jumbo loan is your best bet. Jumbo mortgages allow loan amounts above conforming loan limits, which max out at $ in most parts of the U.S.

On the other hand, if you’re a veteran or service member, a VA loan is almost always the right choice. VA loans are backed by the U.S. Department of Veterans Affairs. They provide ultra-low rates and never charge private mortgage insurance (PMI). But you need an eligible service history to qualify.

Conforming loans and FHA loans (those backed by the Federal Housing Administration) are great low-down-payment options.

Conforming loans allow as little as 3% down with FICO scores starting at 620. FHA loans are even more lenient about credit; home buyers can often qualify with a score of 580 or higher, and a less-than-perfect credit history might not disqualify you.

Finally, consider a USDA loan if you want to buy or refinance real estate in a rural area. USDA loans have below-market rates — similar to VA — and reduced mortgage insurance costs. The catch? You need to live in a ‘rural’ area and have moderate or low income to be USDA-eligible.

Mortgage rate strategies for December 2023

Mortgage rates displayed their famous volatility in 2023. Uncertainty in the banking sector led to downtrends, but ongoing inflation battles, Fed hikes and a hot job market drove growth.

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At both its September and November meetings, the central bank held off on a rate hike, preferring to see if the economy would keep cooling organically. Going forward, the FOMC said it would adjust its policies as necessary — which could mean additional hikes or possibly none at all.

Here are just a few strategies to keep in mind if you’re mortgage shopping in the coming months.

Be ready to move quickly

Indecision can lead to failure or missed opportunities. That holds true in home buying as well.

Although the housing market is becoming more balanced than the recent past, it still favors sellers. Prospective borrowers should take the lessons learned from the last few years and apply them now even though conditions are less extreme.

“Taking too long to decide to make an offer can lead to paying more for the home at best and at worst to losing out on it entirely. Buyers should get pre-approved (not pre-qualified) for their mortgage, so that the seller has some certainty about the deal closing. And be ready to close quickly — a long escrow period will put you at a disadvantage.

And it’s definitely not a bad idea to work with a real estate agent who has access to “coming soon” properties, which can give a buyer a little bit of a head start competing for the limited number of homes available,” said Rick Sharga.

Buyer demand is lower than a typical year, but the market usually heats up in spring and summer. Being decisive (and prepared) should only play to your advantage.

Shopping around isn’t only for the holidays

Since interest rates can vary drastically from day to day and from lender to lender, failing to shop around likely leads to money lost.

Lenders charge different rates for different levels of credit scores. And while there are ways to negotiate a lower mortgage rate, the easiest is to get multiple quotes from multiple lenders and leverage them against each other.

“For potential home buyers, it’s important to get quotes from multiple lenders for a mortgage, as rates can vary dramatically, especially during such a volatile period,” said Odeta Kushi.

As the mortgage market slows due to lessened demand, lenders will be more eager for business. While missing out on the rock-bottom rates of 2020 and 2021 may sting, there’s always a way to use the market to your advantage.

How to shop for interest rates

Rate shopping doesn’t just mean looking at the lowest rates advertised online because those aren’t available to everyone. Typically, those are offered to borrowers with great credit who can put a down payment of 20% or more.

The rate lenders actually offer depends on:

  • Your credit score and credit history
  • Your personal finances
  • Your down payment (if buying a home)
  • Your home equity (if refinancing)
  • Your loan-to-value ratio (LTV)
  • Your debt-to-income ratio (DTI)

To figure out what rate a lender can offer you based on those factors, you have to fill out a loan application. Lenders will check your credit and verify your income and debts, then give you a ‘real’ rate quote based on your financial situation.

You should get three to five of these quotes at a minimum, then compare them to find the best offer. Look for the lowest rate, but also pay attention to your annual percentage rate (APR), estimated closing costs, and ‘discount points’ — extra fees charged upfront to lower your rate.

This might sound like a lot of work. But you can shop for mortgage rates in under a day if you put your mind to it. And shaving just a few basis points off your rate can save you thousands.

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Mortgage interest rate FAQ

What are current mortgage rates?

Current mortgage rates are averaging 7.29% for a 30-year fixed-rate loan and 6.67% for a 15-year fixed-rate loan, according to Freddie Mac’s latest weekly rate survey. Your individual rate could be higher or lower than the average depending on your credit score, down payment, and the lender you choose to work with, among other factors.

Will mortgage rates go down next week?

Mortgage rates could decrease next week (Nov. 27-Dec. 1, 2023) if the mortgage market takes a cautious approach to a possible recession. However, rates could rise if lenders account for the Federal Reserve taking measures to counteract inflation or if a global event brings economic uncertainty.

Will mortgage interest rates go down in 2024?

If inflation continues to dissipate and the economy cools or goes into a recession, it’s likely mortgage rates will decrease in 2024. Although, it’s important to remember that interest rates are notoriously volatile and are driven by many factors, so they can rise during any given week.

Will mortgage interest rates go up in 2024?

Mortgage rates may continue to rise in 2024. High inflation, a strong housing market, and policy changes by the Federal Reserve have all pushed rates higher in 2022 and 2023. However, if the U.S. does indeed enter a recession, mortgage rates could come down.

What is the lowest mortgage rate right now? 

Freddie Mac is now citing average 30-year rates in the 7% range. If you can find a rate in the 5s or 6s, you’re in a very good position. Remember that rates vary a lot by borrower. Those with perfect credit and large down payments may get below-average interest rates, while poor-credit borrowers and those with non-QM loans could see much higher rates. You’ll need to get pre-approved for a mortgage to know your exact rate.

Will there be a housing crash? 

For the most part, industry experts do not expect the housing market to crash in 2023. Yes, home prices are over-inflated. But many of the risk factors that led to the 2008 crash are not present in today’s market. Low inventory and massive buyer demand should keep the market propped up next year. Plus, mortgage lending practices are much safer than they used to be. That means there’s not a subprime mortgage crisis waiting in the wings.

What is the lowest mortgage rate ever?

At the time of this writing, the lowest 30-year mortgage rate ever was 2.65%. That’s according to Freddie Mac’s Primary Mortgage Market Survey, the most widely used benchmark for current mortgage interest rates.

Should I lock my rate now or wait?

Locking your rate is a personal decision. You should do what’s right for your situation rather than trying to time the market. If you’re buying a home, the right time to lock a rate is after you’ve secured a purchase agreement and shopped for your best mortgage deal. If you’re refinancing, you should make sure you compare offers from at least three to five lenders before locking a rate. That said, rates are rising. So the sooner you can lock in today’s market, the better.

Is now a good time to refinance? 

That depends on your situation. It’s a good time to refinance if your current mortgage rate is above market rates and you could lower your monthly mortgage payment. It might also be good to refinance if you can switch from an adjustable-rate mortgage to a low fixed-rate mortgage; refinance to get rid of FHA mortgage insurance; or switch to a short-term 10- or 15-year mortgage to pay off your loan early.

Is it worth refinancing for 1 percent? 

It’s often worth refinancing for 1 percentage point, as this can yield significant savings on your mortgage payments and total interest payments. Just make sure your refinance savings justify your closing costs. You can use a mortgage calculator or speak with a loan officer to crunch the numbers.

How do I shop for mortgage rates? 

Start by choosing a list of three to five mortgage lenders that you’re interested in. Look for lenders with low advertised rates, great customer service scores, and recommendations from friends, family, or a real estate agent. Then get pre-approved by those lenders to see what rates and fees they can offer you. Compare your offers (Loan Estimates) to find the best overall deal for the loan type you want.

What are today’s mortgage rates?

Mortgage rates are rising, but borrowers can almost always find a better deal by shopping around. Connect with a mortgage lender to find out exactly what rate you qualify for.

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1Today's mortgage rates are based on a daily survey of select lending partners of The Mortgage Reports. Interest rates shown here assume a credit score of 740. See our full loan assumptions here.

Selected sources:

  • https://www.blackknightinc.com/category/press-releases
  • https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm
  • http://www.freddiemac.com/research/datasets/refinance-stats/index.page
Paul Centopani
Authored By: Paul Centopani
The Mortgage Reports Editor
Paul Centopani is a writer and editor who started covering the lending and housing markets in 2018. Previous to joining The Mortgage Reports, he was a reporter for National Mortgage News. Paul grew up in Connecticut, graduated from Binghamton University and now lives in Chicago after a decade in New York and the D.C. area.