2 MIN READ
Published July 10, 2024
Experts in the mortgage industry forecast minimal relief for aspiring homebuyers hoping for lower rates by the end of 2024. Projections from key players like Fannie Mae and the National Association of Realtors (NAR) suggest that average 30-year mortgage rates will hover around 6.7% to 6.6%, with Freddie Mac anticipating a slight dip to 6.5%.
According to Freddie Mac's June Economic, Housing, and Mortgage Market Outlook, despite recent volatility, mortgage rates are expected to stay above 6.5% throughout the year. This follows a period of historically low rates during the pandemic, which surged due to the Federal Reserve's aggressive rate hikes, resulting in home sales dropping to levels not seen since 1995 last year.
As of July 3, the average 30-year fixed-rate mortgage stands at 6.95%, marking a slight increase from previous weeks and the same time last year. Meanwhile, the 15-year fixed-rate mortgage sits at 6.25%.
Market observers and potential homebuyers anticipate a possible decrease in mortgage rates if the Federal Reserve decides to lower its key interest rate. However, the Fed's cautious approach toward inflation has delayed such a move.
Lawrence Yun, NAR chief economist, highlighted the potential for mortgage rates to decrease even before any Fed action, depending on changes in the 10-year Treasury bond yield. Despite these challenges, Yun emphasized the enduring appeal of homeownership for first-time buyers.
Melissa Cohn, regional vice president of William Raveis Mortgage, noted a persistent demand from buyers who have been patiently waiting to enter the market. "We're just not going to wait anymore," she emphasized, underscoring the determination among some buyers to seize current real estate opportunities.
While mortgage rates remain stubbornly high and home prices near peak pandemic levels, many Americans continue to pursue homeownership, anticipating future shifts in both rates and prices.
This perspective highlights the complex dynamics influencing today's real estate market, where strategic timing and market confidence play key roles in buying decisions.
Key Insights for Homebuyers:
- Mortgage rates are expected to stay above 6 percent through the end of 2024.
- The Federal Reserve’s focus on inflation makes immediate rate cuts unlikely.
- Current high mortgage payments are more than double those of pre-2020 homes.
- Despite high rates, some buyers are motivated by long-term benefits and potential future price increases.