Mortgage Rates Forecast for 2024: Experts Predict How Much Rates Will Drop
A look at mortgage rates from Forbes.
According to Forbes, despite expectations that the Federal Reserve will finally cut its benchmark interest rate at its September meeting, many housing market experts don’t anticipate mortgage rates to recede enough in the coming months to make homeownership affordable for many would-be buyers.
Mortgage Rate Predictions for 2024 and 2025
Here’s how some experts predict market conditions will affect the average 30-year, fixed-rate mortgage in Q4 2024 and beyond:
loanDepot: Mortgage rates could fall below 6% in Q4
“Mortgage rates have already dropped to the mid-6% level following news that the Fed is expected to begin cutting rates at their September meeting, and they may continue to fall. However, any further drop will likely be limited until there is more certainty on rate cuts beyond an initial 25 basis points in September. By the end of the year, they may cut rates by 75-100 basis [points], which could bring mortgage rates to the high-5% to low-6% range,” says Jeff DerGurahian, chief investment officer and head economist at loanDepot.
BrightMLS: 30-Year, fixed rate to hover below 6.4% in Q4
“Rates will be bumping around over the next few weeks and should come down further as we head into fall,” Lisa Sturtevant, chief economist at BrightMLS, tells Forbes Advisor. “I’m expecting that average rates on a 30-year fixed-rate mortgage will still be between 6.2% and 6.4% by the fourth quarter.”
Fannie Mae: Rates will average 6.4% in Q4 and continue descending
Fannie Mae expects the average 30-year fixed mortgage rate will continue moving down at a modest pace into the next year, and the 30-year fixed rate will average 6.4% for the second quarter of 2024, followed by an average of 6.2% in Q1 2025.
Freddie Mac: Rates will remain elevated through 2024
In its August Economic, Housing and Mortgage Market Outlook forecast, Freddie Mac notes that in anticipation of an upcoming central bank-approved federal funds rate cut has already put downward pressure on mortgage rates. However, while a rate cut should prompt further easing, Freddie Mac expects mortgage rates to experience only gradual declines in the coming quarters.
Mortgage Bankers Association (MBA): Rates will average 6.5% in Q4
MBA expects the 30-year fixed-rate mortgage to decline throughout the rest of the year, averaging 6.5% in the fourth quarter, according to the real estate finance association’s July Mortgage Finance Forecast. MBA economists anticipate rates to continue trending downward next year, averaging 6.4% in the first quarter of 2025.
