Can You Avoid That 6% Mortgage Rate? Here’s what the pros think will happen next with mortgage rates

What might mortgage rates be like this month?

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Last week, average 30-year mortgage rates crossed the 6 percent mark — though many borrowers can still get rates lower than that — after staying below that for most of July and August, Bankrate data showed . So we asked the pros: What happens next? Should we prepare for higher rates?

Greg McBride, chief financial analyst at Bankrate, says the economy will slow faster than inflation, so more rate yo-yoing should be expected in September, but it won’t be huge swings that we’re seeing. But, he adds, we should keep in mind that the pace of the Federal Reserve’s balance sheet runoff will double starting in September. “This will be most evident in the mortgage-backed securities market. All else being equal, that’s an upward influence on mortgage rates,” says McBride. (You can see the lowest prices available here.)

According to the National Association of Realtors, (NAR), data shows that mortgage rates have already priced in the Fed’s upcoming rate hikes. “Meanwhile, inflation has probably peaked, meaning it will gradually ease over the coming months. So I don’t expect to see any big surprises in the mortgage market in the coming months,” says Nadia Evangelou, senior economist and forecasting director at NAR. “While there are signs that inflation may have peaked, a half percentage point rate hike is more likely [this month]. So, mortgage rates will not be significantly affected by the upcoming increase,” Evangelou says.

For its part, NerdWallet points out that the Fed will update its interest rate policy on September 21st. While “interest rates often stabilize in the two or three weeks before Fed meetings…. the fallout from the announcement could be another matter,” the site reads. This could mean “upward and downward increases in mortgage rates,” and the site warns: “Borrowers should brace themselves: mortgage rates could rise, like someone climbing two flights of stairs steps up and one step down. Such a course would be consistent with this year’s upward trend in mortgage rates.” (You can see the lowest prices available here.)

And as Mike Fratantoni, MBA chief economist, noted in a statement: “Mortgage rates moved higher … as markets continued to reassess the outlook for the economy and the path of monetary policy, with expectations for near-term interest rates to move and stay higher for longer.” He added: “Recent economic data will likely prevent any significant fall in mortgage rates in the near term, but the strong labor market reflected in the August data should support housing demand.”

Of course, all the pros are just taking their best guess and investors are trying to read the tea leaves on the economic outlook over the past few months and mortgage rates have been zigzagging during that time. But the reality seems to be that while there’s no clear consensus on where they’ll go, most professionals we spoke to said there won’t be much of a drop in rates.

Is ARM the right choice if you want a lower rate?

For buyers who don’t plan to stay in their homes for more than about five years, an adjustable-rate mortgage can offer a lower, fixed interest rate during the first few years of home ownership, helping to lower their monthly payments. “This option can be ideal if you plan to sell your home before the loan changes to an adjustable rate,” says Steve Reich, head of business services at Finance of America Mortgage. Just note that ARMs will adjust and when they do you may have a higher bill.

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