In 2022, everyone was SHOCKED when mortgage rates leapt from 3% to 7% in just half a year. The sudden increase left a lot of people scared, so the market began screeching to a halt by the end of 2022. Now, mortgage rates are still at 7%, but they may not stay there for long. 
In the second part of his multi-episode series, David Sidoni analyzes data and reports from industry experts to drop some truth bombs about mortgage rates in 2023. There’s a lot of opinions floating around out there about where mortgage rates could be by the end of this year, but David gives it to you straight. The bottom line? If you’re ready to buy a home, get prepared NOW.
Here are the biggest takeaways from today’s discussion:
What’s included in your monthly home payment
Where rates are today and how we got here
How first-time home buyers should interpret predictions for 2023
How skyrocketing rent prices will influence the housing market

Episode Highlights:
[01:19] Let’s Talk About Mortgage Interest Rates
Mortgage rates are an important part of your home buying process because they affect how much you can pay on your home per month. Finding out how much you can afford each month as a first-time home buyer is vital to making a wise purchase decision. To know what all is included in a monthly payment can be abbreviated to PITI: principal, interest, taxes and insurance. 
2022 was both a great and not-so-great year for mortgage rates. The early year started out with a comfortable 3%, but by the end of the year this rate soared to 7% where it  is today. So, how did we get to this number and where could this number go in the future? 
[5:51] How Did We Get Here?
No one had ever seen interest rates change like in 2022 before because rates had never skyrocketed that quickly in recent real estate history. Starting back in 1990, mortgage rates hovered around 10%, dropping gradually until 2012 when they settled around 4% through 2022.
When these rates rose to 7% in the middle of 2022, things screeched to a halt in the second half of the year as everyone waited for better rates. Will they decrease again? No one knows for sure. According to the experts, rates could go down or they could go up. 
[7:57] The Bulls and Bears of 2023
There are both optimists and pessimists when it comes to projections for 2023. A handful of experts are predicting ugly things when it comes to rates in 2023. Some economists even predict that 30-year mortgage rates could climb to 8.75% in 2023 while other pessimistic economists predict rates at 8.5%.
Other economists say that rates will peak at 8% at the beginning of the year and then gradually come down to around 6% by the end of the year. Another economist said that the rates will be totally dependent on inflation. If we hit a recession, which we’re leaning toward, then the rates will drop to about 5%. According to predictive data from the American Association of Realtors, rates could settle at 6% by the end of 2023. 
According to David, first-time home buyers need to get ready to buy ASAP. Start your planning to buy a home as soon as you can so you can navigate the market no matter which way it goes.
[24:15] Bidding Wars During a Market Crash? Explain!
Some new home buyers are losing their prospects to bidding wars. It may not make sense during a market crash, but don’t forget all the factors at play here. We’re going back to episode one here with our analysis of:
Increasing rents
Unpredictable interest rates
Low inventory
Normalizing affordability
Slowing sales
Gradually decreasing prices

All of these are making the market the way it is. So, taking it back to mortgage rates. These rates peaked at their 7%, and are now making a very slow decline. Why is that? Something called the 10-year treasury bond rate which is closely correlated to mortgage rates. Usually these rates are about 2-ish% lower than mortgage rates and they travel together at that percentage difference. Currently, the treasury bond rates are increasing and the percenta