2024 Mortgage Interest Rates- What to Expect
2023 has already come and gone, which is hard to believe! 2023 was a year that included many spikes in interest rates along with many months of low inventory. As of December 2023, the average interest rate on a 30-year fixed loan was around 7.29%…yikes, that is much higher than the 2.6% fixed interest rates we saw in 2021. Higher interest rates have led to a slower-than-average housing market throughout the past year.
So what’s next for mortgage interest rates? As we approach a new year, better interest rates are what most Americans are hoping for! Thankfully, most forecasts for 2024 rates are looking much better.
The end of December brought a drop in interest rates for the ninth straight week in a row. In December 2022, interest rates hovered around 6.42% for a 30-year fixed rate. As of December 2023, interest rates were around 6.61% for a 30-year fixed rate. This number is the lowest that we have seen since August 2023 when interest rates hovered around 7% and in some cases even higher.
The future’s looking bright for home sales
It is predicted that the feds will cut rates three more times over the next year. This is great news for those in the market for a new home! The lull that some areas have seen for home sales and purchases will hopefully be over with and the movement in the market will be a little more exciting in 2024.
If interest rates are cut to 5%, this will be huge for every aspect of the housing market. Rates are not predicted to drop to 5% overnight but hopefully, by the end of 2025, we will see some major relief from the ever-increasing interest rates that occurred throughout 2023.
What to expect with home prices in 2024
One would think the drop in interest rates would lead to some relief in housing prices. However, we will not see the prices of homes come down immediately. As the year goes on, each month should bring a drop in prices and hopefully rates. Currently, supply is still low for the housing market in most places which is keeping the price of homes higher, what a bummer. Let’s hope for more movement and better pricing as the year progresses.
Here’s to a new year with new interest rates! We are hopeful for the housing market of 2024 to be much brighter than the past year. Remain patient and informed, this could be the year for your next move!