2024 Mortgage Rate Projections: Analysts Anticipate Rate Declines
Mortgage rates continue to struggle to establish a consistent downward trend. After peaking at 7.22% in early May 2024, the average 30-year fixed mortgage rate has dropped by 36 basis points. For the week ending June 27, it stood at 6.86%, as reported by Freddie Mac.
Many experts in the housing market do not foresee significant declines in mortgage rates in the coming months unless the Federal Reserve opts to reduce its benchmark interest rate.
Predictions for 2024 suggest varied outlooks:
Freddie Mac anticipates rates will remain above 6.5% through the second quarter.
Fannie Mae has adjusted its forecast, expecting rates to average 7.1% in Q3.
The National Association of Realtors projects rates to average 6.7% in Q3, potentially decreasing to 6.5% by year-end with Federal Reserve rate cuts.
Bank of America predicts rates may drop below 7% later in the year, depending on inflationary pressures.
The Mortgage Bankers Association forecasts a decline to 6.7% by Q3, with potential further decreases by year-end following expected Fed rate cuts.
KPMG Economics suggests rates are likely to hover near 7% through Q2, with possible declines in 2025.
Palisades Group expects rates to stay above 6.25% throughout 2024.
Advisor Credit Exchange estimates rates will range between 7% and 7.5% in the near future.
The Federal Reserve's recent decision to maintain rates unchanged signals a cautious approach amid persistent inflation. This stance has disappointed those hoping for imminent rate reductions.
Regarding refinancing opportunities in 2024, the decision depends on current mortgage rates compared to those secured initially, particularly during the low-rate period of 2020-2021. Refinancing could potentially lower monthly payments, especially if rates drop significantly.
However, borrowers should consider all factors, including potential extension of loan terms and overall interest costs, before deciding to refinance.
As economic conditions evolve, mortgage rate movements will continue to be closely monitored, influencing decisions in both home buying and refinancing markets.
