Mortgage Forecast: Will Rates Go Down in 2024?
Mortgage rates are anticipated to decrease later this year as the U.S. economy weakens, inflation eases, and the Federal Reserve lowers interest rates. However, until the Fed observes signs of slowing economic growth, interest rates will remain elevated for an extended period.
According to USA News, mortgage rates are expected to decline when the Federal Open Market Committee cuts the benchmark interest rate, which is likely to happen in the second half of 2024. But as long as inflation runs hotter than the Fed would like, rates will remain elevated at their current levels.
“An environment where rates continue to hover above seven percent impacts both sellers and buyers,” says Sam Khater, Freddie Mac’s chief economist, in a May 9 statement. “Many potential sellers remain hesitant to list their home and part with lower mortgage rates from years prior, adversely impacting supply and keeping house prices elevated. These elevated house prices add to the overall affordability challenges that potential buyers face in this high-rate environment.”
Most economists agree that rates should pull back gradually to the mid-6% range by year-end, although some expect rates to remain elevated around the 7% threshold. Here’s what experts have to say about their predictions for this year.