What Mortgage Rate Are You Waiting For?

It's no secret that mortgage rates have significantly impacted housing affordability in recent years. But there’s some positive news on the horizon—rates are finally showing signs of easing. In fact, according to Freddie Mac, they’ve recently dipped to the lowest level we've seen so far in 2024 (check out the graph below).

If you're in the market for a new home, you're probably asking yourself: just how low will these rates go? Let’s dive into what experts are predicting so you can plan ahead.

Mortgage Rate Predictions from the Experts

Experts believe that the overall downward trend will continue as long as inflation remains under control and the economy slows. That said, expect some fluctuations as new economic reports roll in—it's a bumpy ride, but the general direction is promising.

The key takeaway here? Don’t let those occasional upticks throw you off course. Compared to the peak we saw earlier this year, rates are now down about a full percentage point.

Looking ahead, many experts foresee mortgage rates hovering around the low 6% range in the coming months. However, this projection will largely depend on how the economy evolves and the Federal Reserve's decisions in the near future.

In fact, more optimistic forecasts for 2024 are starting to emerge. For example, Realtor.com recently updated its prediction:

"Mortgage rates have been adjusted downward as economic signals suggest that the Fed might begin to reduce the Federal Funds rate in 2024. Our revised forecast for the annual mortgage rate average is 6.7%, and we’ve updated our year-end estimate to 6.3%, down from 6.5%."

What's Your Ideal Mortgage Rate?

So, what does this mean for you and your home-buying plans? If you’ve been holding off, waiting for the right time to act, know that rates are already trending downwards. The question is: when will you feel comfortable jumping back in?

As Sam Khater, Chief Economist at Freddie Mac, puts it:

“The drop in mortgage rates boosts the buying power of prospective homebuyers, potentially sparking renewed interest in entering the market.”

Now, it’s time to ask yourself: what’s the magic number for you?

Is it 6.25%? Maybe 6.0%? Or perhaps you’re waiting for rates to dip below 6%? The specific rate that makes you confident to start your search is personal to your situation. Once you know what that number is, you don’t need to monitor the market daily.

Instead, connect with a real estate expert who can keep you informed. They’ll track rates for you and let you know when your target rate is within reach.

Bottom Line

If higher mortgage rates have put your home-buying plans on pause, now is the time to reassess. Think about the rate you’re comfortable with and team up with a real estate professional who can help you seize the opportunity when the time is right.