What Are Mortgage Interest Rates Going to Do for the Rest of 2024?

“Hey Jim, what do you think rates are going to do for the rest of the year?”

It’s a great question… One I get asked several times a week. And if you’re in the market to purchase a home or considering refinancing to take cash out it’s a really important question too!

Unfortunately, there are a lot of conflicting views out there. It doesn’t take more than a couple of minutes of cyber-scrolling to feel like you want to throw in the towel and give up. 

But, if you stick with me for the next few minutes of this article, I’ll share with you a solid understanding of what we are likely to see according to the National Association of Realtors Chief Economist Lawrence Yun.

Reportedly Yun believes - 

The budget deficit remains high, and the various inflation metrics remain

above the comfort level. That means the mortgage rates will likely be in the 6%

to 7% range for most of the year.

Mortgage Bankers Association (MBA). MBA’s baseline forecast is for mortgage rates to end 2024 at 6.1% and reach 5.5% at the end of 2025 as Treasury rates decline and the spread narrows.

But he’s not the only one weighing in with solid predictions. 

Bank of America head of retail lending Matt Vernon shares - 

The Fed’s likely decision to cut rates in 2024 would be a key factor that could breathe new life into the housing market. However, it’s important to note that significant drops in mortgage rates might not happen in the early months of 2024. If any reductions occur, they are likely to be gradual, possibly beginning in the latter part of the year.

Rates and Trends

A big part of my job is monitoring rates and their trends. In the current market, there isn’t one perfect answer. 

Many factors go into what determines mortgage rates – with inflation being one of them. And with the recent inflation report not being up to expectations that makes an interest rate reduction not likely in the near future.

My Prediction

When you take all the information as a whole, it’s my thought that rates have mostly stabilized. 

We should see rates hovering in the mid-6s (or so) with slight movements up or down through the 3rd quarter of this year.

After that, it seems most experts think we may start to see rates drop again starting in 2025. Some believe we may see them hit 5.5% or so. However, there’s no guarantee.

Two Major Factors

Two main factors come into play this year (that many other years simply don’t have). 

First, the 4th quarter heading into 2025 is once again showing inflation being the biggest…

And second, election years always bring a bit of uncertainty.

In Conclusion

The bottom line is, the once-in-a-lifetime ultra-low rates in 2020 and 2021 are permanently behind us with a gradual reduction to a normalized rate in the mid 5’s or so.

If you have questions regarding a home purchase or refinance, please contact me. As always consultations are free, honest, and transparent.