Will Rates Go Down in 2024? The Experts Weigh In.

What do the experts predict?

As of Oct. 11, 2023, the average 30-year fixed mortgage rate in the United States is 7.83%, the highest level in more than two decades. And the good news is that most experts seem to think mortgage rates will fall in 2024. Many predict that inflation will decline and the Fed will start cutting rates, both of which would be conducive to lower mortgage rates. But there isn't a great deal of agreement on how fast they could fall.

(Note: All of these are referring to 30-year, fixed-rate mortgages.)

   o Mortgage giant Fannie Mae sees rates falling significantly to 6.8% in the first quarter of 2024 and continuing to decline gradually throughout the year, reaching 6.3% in the fourth quarter.

   o The National Association of Realtors sees the average 30-year rate falling to 6% by the end of 2024. o The Mortgage Bankers Association sees rates hitting 5.4% during the fourth quarter.

   o A Navy Federal Credit Union economist predicts that 30-year mortgage rates will start 2024 in the 7.25%-7.5% range, and fall to a range of 5.5%-6% by the end of the year.

   o A senior Morningstar economist sees a sharper de-cline, with rates declining to about 4.5% by 2025.

Where will mortgage rates be at the end of 2024?

As we've seen, most experts and organizations predict that mortgage rates will be significantly lower at the end of 2024 than they are today. But it's by no means a certainty, and nobody knows for sure where rates will end up.

There's a solid case to be made that we could see sub-5% mortgage rates by the end of 2024 if inflation gets under control quickly and the Fed starts cutting rates. But rates of 8%, 9%, or even higher are entirely possible if the Fed must continue raising rates to keep inflation in check.

Having said all that, you don't necessarily need to let higher mortgage rates discourage you from becoming a homeowner. Assuming you can afford the monthly payment, you can always refinance the loan quite easily if rates go down. Plus, it's not as if rent has become any cheaper. If homeownership seems like the best move for you (aside from high borrowing costs), it could still be a good idea to get rate quotes from some top mortgage lenders and get the process started.

Via the Motley Fool