In 2023, the Federal Reserve gave the idea that it may start reducing interest rates in 2024 as inflation is easing. Many experts are forecasting subdued mortgage rates for 2024.
Mortgage rates began easing from two-decade highs during the fourth quarter after the Federal Reserve left its policy benchmark unchanged for three consecutive meetings.
How Far Will Mortgage Rates Fall In 2024?
Experts are predicting a fall in mortgage rates in 2024. As per some experts, this means that mortgage rates won’t fall much more in 2024.” I don’t think rates will fall much more for most of the year. We had a steep decline at the end of last year, which will probably stay stable from this point forward,” says Michael Gevurtz, CEO of Bluebird Lending.
However, others are expecting mortgage rates to take a dip further. As the Fed cuts rates, Jeff Lichtenstein, founder of Echo Fine Properties, is expecting mortgage rates to fall slightly this year.
What Factors Help the Experts Monitor Where Rates Are Heading Towards?
Experts are considering economic and financial indicators — some of which inform the Fed’s decision to get an idea of where rates are going.
Economic factors like strong GDP numbers could mean that the Fed either maintains or even raises rates, which will affect mortgage rates. If these numbers fall, which will mean that the economy is slowing down, it may result in the Fed’s declining rates.
Real estate data also tells about mortgage rates. “This is an encouraging development for the housing market and, in particular, first-time homebuyers who are sensitive to changes in housing affordability,” Sam Khater, Freddie Mac’s chief economist, said. “However, as purchase demand continues to thaw, it will put more pressure on already depleted inventory for sale.” more housing starts often coincide with builders when they expect lower rates, though there can be multiple factors that affect whether housing go up or down,
The bond market also talks about mortgage rates. If bond yields become more steady, mortgage rates are more likely to decline.
When Will Mortgage Rates Fall In 2024?
Actual rate cuts may lead to an additional decline in mortgage rates, even though mortgage rates already started falling in December as the Fed took a much softer stand.
Many experts think mortgage rates will take a much longer time to come down. “If rates fall, it won’t be towards the end of the year,” says Gevurtz.
And it would not be a smooth downward slope, even if rates decline in 2024. According to Freedman, “They’ve already started to come down, and I believe they will continue to go down, but not in a strictly linear fashion,”
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