Mortgage rates are expected to stay above pandemic-era levels in 2024 after soaring past 8% last year, as predicted by experts.
Many real estate experts predict the mortgage rate for the 30-year fixed term to linger between 6.1% and 7% in the first quarter of this year before falling by the end of 2024. However, the rates are not expected to fall below 6%.
"Mortgage rates are likely to remain well above pandemic-era record lows because financial markets increasingly believe the country will avoid a recession in 2024," Redfin Chief Economist Daryl Fairweather told USA Today.
"Mortgage rates will fall to about 6.6% by the end of 2024. The gradual decline in rates combined with the small dip in prices will bring homebuyers some much-needed relief," he added.
Jeff Taylor, founder and managing director at Mphasis Digital Risk, also echoed Fairweather's prediction, noting that the estimated range of mortgage rates for 30-year fixed terms would be in the mid-6 % range this year.
However, Greg McBride, chief financial analyst at Bankrate, predicts mortgage rates will decline to 5.75% in the second half of the year.
"Mortgage rates will spend the bulk of the year in the 6% range," he said, "with movement below 6% confined to the second half of the year," McBride said, as quoted by CNBC.
The predictions may find solid ground as the Federal Reserve is expected to cut its benchmark interest rate this year.
"Inflation has been coming down but it's still running well above our 2% target. Given how far we have come, along with the uncertainties and risks we face, the committee is proceeding carefully," Fed Chair Jerome Powell said during a press conference in Washington, D.C., in November. "The process of getting inflation sustainably down to 2% has a long way to go. We remain strongly committed."
Current Mortgage Rates
The interest rate on a 30-year fixed-rate mortgage is 6.37% as of Wednesday, up 0.250% from Tuesday's rate but down 0.24% from the week ending Dec. 28, 2023. The mortgage rate on a 15-year fixed-term also rose by 0.125% from Tuesday to 5.37% on Wednesday. However, it fell from 5.93% in the week ending Dec. 28, 2023.
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