Experts in the housing market are forecasting a positive outlook for potential homebuyers in 2024. As inflation rates decrease and the economy shows signs of cooling off, mortgage rates are expected to follow suit and trend downwards, possibly dropping below 6%.
The Federal Reserve's indication of considering a cut to the federal funds rate this year is seen as a positive move that could alleviate some of the upward pressure on mortgage rates. However, it is unlikely that rates will return to the historic lows seen in 2020 and 2021.
While there is optimism for a decrease in mortgage rates, the exact timing of this decline is uncertain. The Federal Reserve is closely monitoring inflation data and may delay rate cuts until later in the year if inflation remains stubborn.
Forecasts from leading organizations such as the Mortgage Bankers Association and the National Association of Realtors predict that 30-year mortgage rates could fall into the 6.1% to 6.9% range in 2024. Some forecasts even suggest rates dropping below 6% by the end of the year.
Despite the potential for lower rates, experts caution that waiting for rates to decrease significantly may not be the best strategy for prospective homebuyers. Many current homeowners already have mortgage rates below 6%, with a significant percentage below 4%. This has led to limited inventory in the housing market, keeping prices relatively stable.
For buyers considering purchasing a home now, there is an opportunity to lock in a purchase at current rates and potentially refinance in the future when rates fall. Refinancing can help lower housing costs and avoid the competitive market conditions that may arise with lower rates.
Overall, the consensus among experts is that mortgage rates are likely to trend down in 2024, offering potential benefits to borrowers. While exact rate decreases may vary, the general expectation is for rates to ease over the next few years, providing relief to homeowners and buyers alike.
