Some Experts Say Mortgage Rates May Fall Below 6% Later This Year

Mortgage Rate Trends: What You Need to Know for 2024

There's been a lot of buzz and confusion about mortgage rates lately, especially when it comes to day-to-day fluctuations. Here's the scoop: since their peak of nearly 8% last fall, mortgage rates have been trending downward overall. If you're considering buying or selling a home, this is a significant development. While the rates may continue to fluctuate based on various economic factors—like inflation and reactions to the Consumer Price Index (CPI)—don't get too distracted by the short-term volatility. Experts generally agree that the overarching downward trend should continue throughout the year.

What to Expect for Mortgage Rates

While we won't return to the record-low rates experienced during the pandemic, some experts predict that rates could dip below 6% later this year. Dean Baker, Senior Economist at the Center for Economic Research, mentions, "They will almost certainly not fall to pandemic lows, although we may soon see rates under 6.0 percent, which would be low by pre-Great Recession standards."

Baker isn't the only one making this call. The latest Fannie Mae projections also suggest we may see rates below 6% by the end of the year. Take a look at the chart below, showing mortgage rate projections for 2024. It compares the forecasts from December with an updated one released just a month later. If you look closely, you'll see that the projections are on a downward trend. As experts watch market trends and the broader economy, these re-forecasts reflect growing confidence in a continued decline, particularly if inflation cools.

What Does This Mean for You?

Even though no one can predict the exact rate and timing of changes, it's clear that short-term volatility is to be expected. So, don't let minor fluctuations scare you. Instead, focus on the broader trend. If you've found a home you love in today's market—especially where meeting your budget and needs can be challenging—it's not advisable to try timing the market and wait for rates to drop below 6%.

Since rates are already lower than they were last fall, there's an opportunity right now. A slight quarter-point dip in rates can boost your purchasing power. If you hesitated to move last year because rates were high, now might be the time to act. Connect with a real estate agent to get started.

The Bottom Line

If you're looking to buy a home in 2024, this could be a piece of good news. Interest rates have been a significant factor for many home buyers over the past 12 months. High rates reduce buyers' spending power, but with rates expected to drop, you can lock in favorable terms now and refinance later. For sellers, the increase in buyers could lead to improved property values and fewer days on the market compared to last year. Don't miss out on this opportunity—it's a great time to make your move.

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