First Title Group

Good news for borrowers: The wait for lower rates may soon be over. Mortgage rates have dropped quite a bit from where they peaked in October, and they could finally drop below 6% by the end of 2024.

The latest economic data show that inflation is slowing and the economy is cooling. The Federal Reserve seems pleased with these developments, and has indicated it’s ready to consider cutting the federal funds rate this year. All of this will remove a lot of upward pressure off of mortgage rates.

The not-so-good news: Rates probably won’t go back to the historic lows we saw in 2020 and 2021. And once rates fall, homebuyers will likely have other challenges to contend with, including increased competition and rising home prices.

Will mortgage rates go down in 2024? Right now, it’s looking like they will, but there are some things homeowners and buyers should know. Check out our in-depth mortgage rate forecast for 2024.

Why are mortgage rates so high? Like other consumer rates, mortgage rates are impacted in large part by what’s going on in the economy. Rates climbed in 2022 in response to rising inflation. To try to quell rising prices, the Fed started aggressively hiking the federal funds rate, which has also kept mortgage rates elevated.

But inflation has slowed significantly since it peaked in June 2022, when prices had risen 9.1% year over year, according to the Bureau of Labor Statistics. In December 2023, the Consumer Price Index was up 3.4% year over year, and it’s expected to slow even more in the coming months.

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