Tim's Guess for Mortgage Rates for 2023

I thought I would publish this "guess" for the sheer entertainment value to show the dramatic increase in mortgage rates and to put in perspective the damage that has likely been done to the purchasing power of home buyers.

The Fed has engineered an attempt to shut down an excessive spending to cool the economy down and we are all waiting for reverberations to indicate that they have been successful.

M2 money supply, which I will add on a follow-on chart, is declining at a sharp rate which is indicative of recession ahead. I believe this M2 money supply contraction is a sign that mortgage rates will fall and here is a "guess" just to put a guess out there.

There is 1 datapoint per week for this series and you can see the box that represents a week as shown with a gray box around the blue line.

I added the 2008 contraction for reference.

Let's see what happens.

I hope this is wrong because it will mean that the economy is falling sharply, but also it would imply that the Fed believes it will have conquered inflation.

Tim West

April 26, 2023 9:54AM

Comment:

You can plot M2 Money Supply here on TradingView and plot the YOY%Chg to see that Money Supply is extremely weak and signaling that money is being extracted from the markets which will cut back on inflation pressures.