In 2023, mortgage rates for 30-year fixed conventional loans rose as high as 8.45%. While many prospective buyers were able to pursue their dreams of buying a home, others decided to hold off on their plans in hopes of declining rates. Now, it seems like their patience may be paying off. In May of 2024, rates fell below 7% for the first time in weeks. But will the trend continue? Will rates for home mortgage loans continue going down? Here’s what you need to know.
Outlook for Mortgage Rates in 2024
While higher than the historically low rates we saw in 2020, rates today are still a far cry from the extremes we’ve seen in the past. For example, in 1981 rates for home mortgage loans climbed as high as 18.63%, making it expensive for many to borrow money to buy a house.
That being said, when it comes to buying a home in general, timing is key. Mortgage rates can change dramatically within just a few weeks.
Unfortunately, it’s impossible to say for certain where rates are headed. Unexpected events happen that cause a shift in the market. Even experts have a hard time agreeing on what the future will look like.
As for 2024, it seems that opinions remain divided. Fannie Mae seems optimistic and predicts that mortgage rates will wind up at about 6.4% by the end of the year.
On the other hand, the experts at Freddie Mac are skeptical. They believe that mortgage rates are on the rise and will remain elevated for the rest of the year.
Should Prospective Buyers Wait? Not Necessarily!
There are compelling reasons why prospective buyers might consider purchasing a home sooner rather than waiting, even if the current conditions aren’t perfect. For example, buying now may allow borrowers to avoid rising home prices and start building equity.
Additionally, as we alluded to earlier, current mortgage rates are relatively low historically. Right now, buyers have an opportunity to lock in a relatively affordable loan. What’s more, homeownership also offers tax advantages and a stable living situation.
If market conditions change or your personal finances improve in the future, you can choose to refinance. Refinancing can allow you to benefit from a lower interest rate, adjust your loan terms, consolidate debt, or eliminate Private Mortgage Insurance (PMI).
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