Will mortgage rates go down in 2024?
District Lending’s base case analysis reveals that 30-year fixed rate mortgage rates could hit the low 6% range by the end of 2024.
Here’s a summary of how five industry experts expect market conditions to impact the average 30-year, fixed-rate mortgage rates next year:
- Q1 2024: Mortgage rates likely around 7% to 7.25%.
- Q2 2024: Mortgage rates likely around 6% to 6.5%.
- Q3 2024: With anticipated gradual declines, mortgage rates could be in the lower 6% range.
- Q4 2024: The trend points to a stabilization or further decrease with mortgage rates potentially around 5.8% to 6.1% by the end of 2024.
“We expect 2024 to be a big recovery year for the housing market as mortgage rates begin to decline in the second quarter next year. All eyes are on the Fed as we expect them to not only pause further rate hikes, but also start cutting rates by summer 2024.”– Josh Rapaport, Founder & CEO @ District Lending
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Will Mortgage Rates Go Down in 2024?
Here’s what mortage rates will do in 2024 according to industry experts:
- Lawrence Yun from the National Association of Realtors predicts that mortgage rates might drop to around 7% soon and further decrease to the 6% zone by spring 2024.
- Crystal Sunbury at RSM U.S. thinks that, barring any major economic upsets, we’ll see a gradual decline in mortgage rates, possibly hitting between 6% and 6.5% by spring 2024.
- Mortgage Bankers Association is forecasting that by the end of 2024, rates will settle at 6.1% and might even fall to 5.5% by the end of 2025 as Treasury rates go down.
- Josh Rapaport from District Lending predicts Federal Reserve cuts rates by summer 2024, which could really help energize the housing market, with rates in the mid 6% range in Q3 2024.
- Realtor.com economists predict that mortgage rates will move into the 6% range in 2024.
What Will Mortgage Rates Do Over the Next Five Years?
While it’s difficult to know what mortgage rates will do over the next five years given the volatility we’ve seen in the markets, the consensus among industry experts is that we could see a return to 4-5% mortgage rates by 2025-2026.
A key factor will be whether the Fed can cool inflation back to its target goal of 2%.
When that happens, mortgage rates should continue to move lower over the next five years.
We predict not only a boom in the housing market, but also in the number of refinances.
How Do Market Conditions Impact Mortgage Rates?
A variety of market conditions can impact mortgage rates.
Here’s a list of the most important factors:
- Federal Reserve policies: The federal funds rate impacts short-term and variable interest rates.
- Bond Markets: Yields on U.S. Treasury notes and bonds.
- Secured Overnight Finance Rate: Interest rate set by banks based on the cost of overnight borrowing.
- Constant Maturity Treasury: Yields based on the average yield of different types of U.S. Treasury securities.
- State of the U.S. Economy: Mortgage rates vary based on the current and estimated health of the U.S. economy, and
- Inflation: Mortgage rates are closely linked with inflation.
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About the Author
Brian Reese is a senior advisor and co-owner at District Lending. He is one of the world’s leading experts in veteran benefits, having helped millions of veterans secure their financial future since 2013. Brian is the founder VA Claims Insider, an education-based Coaching & Consulting company whose mission is to educate and empower veterans to get the VA disability benefits they’ve earned for their honorable service. A former active-duty air force officer, Brian deployed to Afghanistan in support of Operation Enduring Freedom. He is a distinguished graduate of management of the United States Air Force Academy and earned his MBA as a National Honor Scholar from the Spears School of Business at Oklahoma State University.
“As a military veteran, I’ve made it my life’s mission to help people live happier and wealthier lives. District Lending brings this mission to life. We believe in integrity, honesty, and transparency, which is why you’ll see our rates right on our website. You’ll find lower rates and zero lending fees, which means you can buy your dream home for less. The savings are passed on to you — the way it should be.”– Brian Reese, Advisor and Co-Owner, District Lending