Mortgage rates have undoubtedly influenced housing affordability over the past few years, but there's good news on the horizon—rates are beginning to come down. In fact, according to Freddie Mac, we've recently hit the lowest rates of 2024 (see graph below):
With rates trending downward, you might be wondering: how much lower will they go? Here's some insight into what you can expect.
Expert Projections for Mortgage Rates
Experts predict that the overall trend of falling rates will continue as long as inflation and the economy remain stable. However, as new economic data is released, some fluctuations are inevitable.
It's essential to focus on the broader trend rather than get caught up in short-term changes. Mortgage rates are down about a full percentage point from their peak in May, and many experts believe rates in the low 6% range are likely in the coming months. This will largely depend on economic conditions and the Federal Reserve's future decisions.
In fact, many experts are already revising their 2024 mortgage rate forecasts to be more optimistic. Realtor.com, for instance, now expects a yearly average rate of 6.7%, with a year-end forecast of 6.3%, down from an earlier estimate of 6.5%.
Knowing Your Target Rate
So, what does this mean for your homebuying plans? If you've been waiting for mortgage rates to drop, know that it's already happening. The key is determining what rate you're comfortable with before re-entering the market. As Sam Khater, Chief Economist at Freddie Mac, notes:
"The decline in mortgage rates does increase prospective homebuyers’ purchasing power and should begin to pique their interest in making a move."
Ask yourself: what rate are you waiting for? Maybe it's 6.25%, 6.0%, or even 5.99%. Whatever your target rate is, once you've decided, you don't need to monitor the market constantly.
Instead, connect with a local real estate professional who can keep you informed and guide you on when it's time to make your move. They'll notify you as soon as rates hit your desired level.
If you've paused your plans to move due to higher mortgage rates, consider the rate that would make you comfortable re-entering the market. Once you have that figure in mind, reach out to a real estate professional who can keep you updated and help you take the next steps when the time is right.
Комментарии