Aquib Nawab
Mortgage
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The Federal Reserve's near-zero rates briefly lowered mortgage rates below 3% during the pandemic's onset. Yet, in 2022 and 2023, inflation and Fed rate hikes led to a steady climb in mortgage rates.
Credits: bankrate
Credits: Canva
In the week ending October 26, 2023, 30-year fixed-rate mortgages averaged 7.79%. Just a few weeks later, for the week ending December 7, 2023, the average fell to 7.03%, according to data from Freddie Mac.
In 2024, three possible scenarios for mortgage rates emerge, rates could potentially fall to around 6.5%, decline further to approximately 6%, or remain stable or even rise.
Credits: Canva
Credits: Brio Direct Banking
In one scenario, 2024 may begin with stable rates, followed by a 0.5% decline to 6.5% for 30-year mortgages by mid-year. Experts like Peter Idziak predict this decline due to expected cooling of inflation and labor market weakness.
Another scenario foresees a significant rate drop, potentially to about 6% for 30-year fixed-rate mortgages. Russ Krivor and Jerry Koors cite a cooling economy, reduced consumer confidence, and slower rent growth as potential factors driving this decline.
Credits: Canva
Credits: Canva
Despite expectations of declining mortgage rates in 2024, there's a chance they stay steady or rise if inflation worsens. CME FedWatch Tool displays rate change probabilities, with experts speculating on potential Fed rate cut delays.
CME FedWatch Tool suggests a 53.5% chance of rate stability in March 2024, with only a 0.1% probability of rates remaining the same by December 2024, potentially leading to the Fed considering delaying rate cuts, as suggested by experts like Peter Idziak.
Credits: wsj
Credits: Canva
Experts generally foresee modest rate drops in 2024, suggesting that homebuyers may not experience the sub-3% rates, which was seen during the pandemic.
Homebuyers are encouraged to consider factors within their control, such as shopping around for the best rates and finding a home that fits their budget.
Credits: Canva
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