Source: Yahoo! — 

Homebuyers hoping for a better climate in 2023 have longer to wait, as they now face the highest mortgage rates to start a new year since 2002.

However, analysts remain hopeful that today’s volatile rates will stabilize in the coming months.

“While mortgage market activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023,” says Sam Khater, Freddie Mac’s chief economist.

“Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of millennial renters will provide support to the purchase market.”

30-year fixed-rate mortgages

The average 30-year fixed-rate is 6.48%, up from last week when the average rate was 6.42%, Freddie Mac reported Thursday.

This time a year ago, the average rate was just 3.22%.

“Although rates are more than double a year ago, rates will likely stabilize below 6% in 2023 as inflation will continue to slow down in the following months,” says Nadia Evangelou, senior economist for the National Association of Realtors.

She acknowledges that only a fraction of potential buyers will be able to afford a home if these conditions linger.