Are mortgage rates likely to fall in 2024? Here's what Freddie Mac predicts. (2024)

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Are mortgage rates likely to fall in 2024? Here's what Freddie Mac predicts.? ›

Unfortunately, the remainder of 2024 may not offer much relief, at least according to economists at mortgage buyer Freddie Mac. "[W]e expect mortgage rates to remain elevated through most of 2024," Freddie Mac said in a Thursday housing outlook report.

The FreddieMac report said higher interest rates will rein in economic growth through the end of 2025. It expects the Fed to lower rates only once in 2024 with the cut coming toward year's end. "As a result, we expect mortgage rates to remain elevated through most of 2024," the report said.

Mortgage rate predictions 2024

The MBA's forecast suggests that 30-year mortgage rates will fall into the 6.4% to 6.7% range throughout the rest of 2024, and Fannie Mae is forecasting the same. NAR believes rates will average 7.1% this quarter and fall to 6.5% by the end of 2024.

Trading Economics offers a more optimistic outlook, predicting a rise to 5% in 2023 before falling to 4.25% in 2024 and 3.25% in 2025. This forecast is supported by Morningstar's analysis, which projects rates between 3.75% and 4%.

Mortgage rates can vary greatly depending on the type of loan, the lender, and the current market conditions. You'll likely see increases in mortgage payments in 2024 – whether you're refinancing to a new deal or defaulting to your bank's standard variable rate (SVR) - because interest rates have gone up.

We foresee both headline and core inflation falling to around 3% year over year by the end of 2024, down from 3.4% and 3.9% on a “trimmed mean” basis, respectively, in February. We expect inflation to fall to the midpoint of the RBA's 2%–3% target range in 2025.

Here's where three experts predict mortgage rates are heading: Around 6% or below by Q1 2025: "Rates hit 8% towards the end of last year, and right now we are seeing rates closer to 6.875%," says Haymore. "By the first quarter of 2025, mortgage rates could potentially fall below the 6% threshold, or maybe even lower."

The 10-year treasury constant maturity rate in the U.S. is forecast to decline by 0.8 percent by 2026, while the 30-year fixed mortgage rate is expected to fall by 1.6 percent. From seven percent in the third quarter of 2023, the average 30-year mortgage rate is projected to reach 5.4 percent in 2026.

Once you find a rate that is an ideal fit for your budget, lock in the rate as soon as possible. There is no way to predict with certainty whether a rate will go up or down in the weeks or even months it sometimes takes to close your loan.

Auto loan rates for new and used vehicle purchases fell in the first quarter of 2024 to 6.73% and 11.91%, respectively, down slightly from the 15-year highs we saw at the end of 2023, according to Experian.

Will mortgage rates ever go down to 3 again? ›

The bottom line

Sure, mortgage rates could fall to 3% at some point, but chances are that's not going to happen anytime soon. Moreover, waiting for rates to drop before you buy your home could backfire. Instead, consider buying your house now and refinancing your mortgage when rates improve.

As of May 30, 2024, the average 30-year fixed mortgage rate is 7.14%, 20-year fixed mortgage rate is 6.95%, 15-year fixed mortgage rate is 6.30%, and 10-year fixed mortgage rate is 6.06%. Average rates for other loan types include 7.04% for an FHA 30-year fixed mortgage and 7.24% for a jumbo 30-year fixed mortgage.

Projections suggest that we may see no rate increases in 2024, and that the Fed might start dropping its rate later this year, according to the CME FedWatch Tool on April 30. If the Fed rate drops, CD rates will likely follow suit, though it's up to each bank and credit union if and when that occurs.

The April Housing Forecast from Fannie Mae puts the average 30-year fixed rate at 6.7% during the first quarter of 2024, falling to 6.4% by year-end. This reflects an upward revision in Fannie's analysis: Two months ago, the mortgage giant expected rates would dip below 6% at the end of this year.

With the current trend in the CA housing market, you'll find better deals on your dream home during Q2 2024. As per Fannie Mae, mortgage rates may drop more in Q2 of 2024 due to economic changes, inflation, and central bank policy adjustments.

According to MCT housing market experts and other experts in the field, the likelihood of a real estate housing market crash in 2024 is low. Overall, while there are factors that could potentially lead to a housing market crash, the current market conditions point towards a more stable situation.

As a whole, analysts are optimistic about the outlook for stock prices in 2024. The consensus analyst price target for the S&P 500 is 5,090, suggesting roughly 8.5% upside from current levels.

ARA Upgrades Its 2024 Rental Industry Economic Forecast to 7.9 Percent. The American Rental Association upgraded its economic forecast for the rental industry, projecting a 7.9 percent increase in rental revenue for 2024, with a total of $77.3 billion in construction and general tool rental revenue.

In March 2024, 2.8% of mortgages were delinquent by at least 30 days or more including those in foreclosure.

The greater Los Angeles multifamily market concluded the first quarter of 2024 with an overall occupancy rate of 95.3% and an average effective rent of $2,196 per unit. Occupancy increased by 10 basis points quarter-over-quarter and has decreased by 40 basis points from a year ago.