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Mortgage Rate Forecast: Will the Rates Go Down?

Plan your home purchase or refinance wisely by knowing about future mortgage rate trends and getting expert predictions for 2024 and factors affecting rates.

by P Nandhini

Updated Apr 16, 2024

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Mortgage Rate Forecast: Will the Rates Go Down?

Mortgage Rate Forecast

Mortgage rates are the interest rates that you pay when you borrow cash to buy a house. Individuals need to know what these rates will be in the future so they can plan ahead. Experts are attempting to predict what mortgage rates will be like in the coming months and years.

Some think rates will go down, whereas others say they might remain high for a while. Some say rates could drop below 7%, but it's difficult to know for sure. Many factors can affect mortgage rates, like how solid the economy is and what the Federal Reserve does with interest rates.

It's important for people who want to purchase a house or refinance their mortgage to pay attention to these predictions so they can make wise choices about their cash.

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Mortgage Rate Predictions 2024

Check below some of the predictions for Mortgage Rate 2024:

Freddie Mac Forecast

Freddie Mac predicts that mortgage rates will remain over 6.5% for the following few months.

Fannie Mae Housing Forecast

According to Fannie Mae, the 30-year mortgage rate will end in 2024 at 6.4%, which is higher than their past forecast. They predict the average rate to be around 6.7% in the second quarter.

National Association of Realtors Prediction

Lawrence Yun, chief economist at the National Association of Realtors, accepts that mortgage rates will likely be in the 6% to 7% run for most of the year due to tall budget shortfalls and expansion metrics.

Mortgage Bankers Association Outlook

The Mortgage Bankers Association forecasts that the 30-year fixed-rate mortgage will end in 2024 at 6.1% and could drop to 5.5% by the end of 2025.

Bank of America Perspective

Bank of America's head of retail lending, Matt Vernon, suggests that while the Federal Reserve's choice to cut rates could boost the housing market, significant drops in mortgage rates might not happen early in 2024. Any reductions are anticipated to be gradual.

MLS Chief Economist View

Dr. Lisa Sturtevant, MLS chief economist, anticipates some fluctuations in rates early in the year but predicts in general drops, with rates possibly hitting 6.2% by the fourth quarter.

KPMG Economics Forecast

KPMG Economics expects mortgage rates to remain underneath 7% in the coming months, particularly if inflationary pressures ease and the Federal Reserve cuts rates in the moment quarter.

Palisades Group Analysis

Jack Macdowell of Palisades Bunch proposes that the market may have overestimated the Federal Reserve's rate cuts. He finds it difficult to imagine more than one or two cuts in 2024, making it hard for mortgage rates to drop below 6.25%.

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Mortgage rates have been changing as of late. They went up a lot final year but have settled around 7% presently. This is still higher than before. Rates for different kinds of contracts, like 30-year and 15-year fixed ones, have also changed.

Some experts say rates might go down a bit in the future, but it's difficult to know for sure. It all depends on things like inflation and what the government does with interest rates. The rates are remaining around 7% now.

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What Will Affect Mortgage Rates?

  • The overall health of the economy can affect mortgage rates. If the economy is doing well, rates might go up. If it's not doing so well, rates will go down.
  • The Federal Reserve, or "the Fed," plays a huge part in setting intrigued rates. If they raise or lower rates, it can influence mortgage rates too.
  • When costs for things like food and gas go up (inflation), it can force mortgage rates higher.
  • If many people want to buy houses, loan specialists might raise rates. But if fewer individuals are buying, rates may go down.
  • Sometimes, government policies or regulations can affect mortgage rates. Changes in tax laws or housing programs can have an effect.
  • Things happening around the world, like conflicts or natural disasters, can too affect mortgage rates. Investors might move money around in response to these events, affecting rates.

When Will Mortgage Rates Go Down?

People are wondering when mortgage rates will get lower.  It depends on things like expansion and what the government does with interest rates. A few thought rates would drop more by now, but they haven't. It's a bit tricky since the economy is strong, which can keep rates higher. Overall, experts think rates may go down, but it's hard to say exactly when.

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