Mortgage Rate 2024: Experts are more hopeful that the cost of a house loan would likely decline in 2024 after a year in which mortgage rates shot to their highest levels since the year 2000.
In an effort to combat historically high levels of inflation, the Federal Reserve aggressively raised interest rates, which contributed to an increase in mortgage rates. In November, the inflation rate dropped to 3.1%, according to the central bank. For the third consecutive meeting, policymakers kept rates at their current range of 5.25 to 5.5 percent in December. Experts said that the Fed was done hiking rates as a result of the action.
Additionally, policymakers hinted that they would start lowering rates in 2024. According to their projections, the federal funds rate will drop to 4.6 percent in 2024. Should this forecast come to pass, mortgage rates may also begin to decrease more sharply.
Freddie Mac reports that in the past two weeks, the 30-year fixed rate has decreased to 6.61. Analysts predict that the decline will persist in the upcoming year.
No change in December 15 mortgage rates for 15- and 30-year terms
Mortgage Rate 2024
Chief Economist at Freddie Mac Sam Khater stated on Thursday that “the rapid descent of mortgage rates over the last two months stabilised a bit this week, but rates continue to trend down.”
Housing experts predict that rates will reach the mid-6 percent range in 2024.
In 2024, mortgage rates will keep falling as inflation improves and Fed rate decreases approach. According to realtor.com senior economist Danielle Hale, mortgage rates might approach 6.5% by year’s end, which would be a significant step towards helping homeowners with affordability. Hale made this prediction earlier this month.
Daryl Fairweather, senior economist at Redfin, hinted that the Fed will also lower interest rates.
“Despite the fact that inflation is mostly under control, the Fed is expected to maintain interest rates at their present level at the beginning of the year. Mortgage rates will drop as the year goes on since they’re probably going to decrease rates two or three times beginning in the summer, she wrote lately.
Fairweather predicted that even though mortgage rates will decline to around 6.6 percent by the end of 2024, they would still remain higher than they were during the COVID-19 pandemic.
