Have you been patiently waiting for the right moment to buy your first home? If so, you could be in luck! According to experts, mortgage rates may finally be on the decline by the end of this year. Here’s what to expect for mortgage rates for buying your first house in 2024.
Buying Your First House: Why Mortgage Rates Matter
Understanding mortgage rates is pivotal when purchasing your first home, primarily because these rates directly influence your financial commitments in several ways. Firstly, the rate of your mortgage dictates the size of your monthly payments.
What’s more, a lower rate not only makes your monthly expenses more manageable but also enhances the overall affordability of the house by reducing the amount you spend on interest. This aspect is crucial, considering the typical 15 to 30-year lifespan of a mortgage, where the interest rate significantly determines the total cost of purchasing your home. Essentially, the lower the rate, the less you end up paying in the long run.
Furthermore, mortgage rates have a direct impact on your ability to budget effectively. Higher rates mean higher monthly payments, necessitating a larger portion of your income to be dedicated to housing costs, which could limit your spending in other areas.
Expert Predictions for Mortgage Rates in 2024
If you’re planning on buying your first house in 2024, you’ll be happy to know that, right now, forecasts are in your favor. Experts seem to agree that mortgage rates will slowly decline throughout the year.
Fannie Mae predicts that rates will fall to about 5.9% by the end of 2024. Similarly, the Mortgage Banker’s Association also predicts that rates will fall to about 6.1%. This is a significant improvement from last year when rates averaged at about 6.9% in December of 2023.
Mortgage Rate Predictions for 2025
If you’re in no rush and think buying your first house can wait, you may be rewarded even further. Fannie Mae expects that rates may drop as low as 5.7% in 2025.
Of course, this is all hypothetical. There’s no telling for sure what will happen in the future. We all learned that lesson during the COVID-19 pandemic. No one could have predicted the historically low rates that we saw in 2020 and 2021.
So while predictions are looking good so far for 2025, there’s also no guarantee. If you think that you may need to buy a home sooner, it may not be worth the risk. But in the end, that’s up to you and your family to decide. Whatever you choose, we will be behind you 100% of the way!
Get Started with Buying Your First House
Take the first step towards homeownership today. Call Mortgage Solutions Financial to speak to an expert about financing options for buying your first house.
