Good news for borrowers: The wait for lower rates may soon end. Mortgage rates have dropped quite a bit in recent months, and they’re likely to continue trending down in 2024.
The latest economic data, including November’s Consumer Price Index report, show that inflation is slowing and the economy is cooling. The Federal Reserve seems pleased with these developments and has indicated it’s ready to consider cutting the federal funds rate next year. All of this will remove a lot of upward pressure on mortgage rates. Instead of waiting for rates to drop, home buyers should consider purchasing now and refinancing later to avoid increased competition.
Mortgage rate predictions 2024:
While no one can say precisely where rates will be, most major forecasts expect rates to fall in 2024. But exactly when will mortgage rates go down? Here’s how a few of the leading players stack up in their predictions:
|
|
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
|
7.0% |
6.6% |
6.3% |
6.1% |
|
|
7.0% |
6.8% |
6.6% |
6.5% |
|
|
7.5% |
6.9% |
6.5% |
6.3% |
Fannie Mae’s forecast suggests that 30-year mortgage rates will fall into the 6.1% to 7% range in 2024, while NAR believes rates will fall a bit further, ending up in the 6.3% to 7.5% range. The MBA forecast predicts that 30-year mortgage rates will drop to 6.1% by the end of 2024.
While there’s some dispute on exactly how much rates will decrease, the general consensus is that mortgage rates will go down in 2024, and they could even end up close to 6% by the end of the year.
Should I wait for mortgage rates to drop before buying a house?
With mortgage rates at the highest level they’ve been in over 20 years, some hopeful homebuyers have decided to wait for lower rates to start shopping for homes. But that’s not necessarily the best strategy, as there are some advantages to buying right now.
While buyers may have a lower rate in 2024, there will be more market competition next year, which will drive higher prices. Buyers should grab a deal now at a lower price and refinance next year when rates do fall. A mortgage refinance replaces your existing mortgage with a new mortgage, often intending to get a lower rate or lower monthly payment. If you can afford to buy a house now, you could avoid a tough housing market next year and have the opportunity to lower your housing costs with a refinance once rates fall. For a cost-benefit analysis of buying now compared to later, contact Andy Schoemehl at 314-221-7797.
Andy Schoemehl | Vice President
314.221.7797 phone | 636.898.1017 fax
[email protected]
aschoemehl.gershman.com
NMLS #258507
16253 Swingley Ridge Rd, Suite 200
Chesterfield, MO 63017
