Are you ready to embark on your homeownership journey? Buckle up, because navigating mortgage rates in 2024 can feel like riding a rollercoaster. Rates have taken a wild ride this year, leaving many homebuyers feeling dizzy and unsure. But fear not, future homeowner! This article will equip you with expert insights on what to expect for mortgage rates next week, empowering you to make informed decisions.
The average 30-year fixed rate dropped from 7.09% on May 9 to 7.02%. The average 15-year fixed mortgage rate also fell, going from 6.38% to 6.28%. The good news? The past few weeks have offered a welcome reprieve. After reaching their peak for the year in early May, mortgage rates have dipped for two weeks in a row. This decline can be attributed to a couple of key factors.
First, the Federal Reserve's recent shift towards a more cautious approach with its asset holdings has impacted the yield on the 10-year Treasury bond, which heavily influences mortgage rates. Second, some economic indicators suggest a potential cooling off of inflation, hinting at the possibility of the Fed easing up on interest rates later in the year. Here are the latest trends seen in the Mortgage Rates.
Mortgage Rate Predictions for Next Week: A Deep Dive
Fastening down a dream home often hinges on securing a favorable mortgage rate. If you're in the throes of house hunting, you're likely glued to mortgage rate updates. This week, we witnessed a continuation of the downward trend in rates, offering a glimmer of hope for potential homebuyers. But what does the crystal ball hold for next week? Let's delve into expert predictions and dissect the forces shaping these rates.
The Forecast: A Likely Continuation of the Downturn
The overwhelming consensus among experts leans towards a further decline in mortgage rates next week. A Bankrate survey paints a clear picture: a staggering 86% of respondents anticipate a decrease, with only 14% expecting rates to hold steady and none predicting an uptick. This aligns with the recent dip in the average 30-year fixed rate, which fell from 7.23% to 7.12% according to the survey.
Dissecting the Decline
Several factors are orchestrating the downward trend in mortgage rates. A key player is the recent inflation report (CPI), which unveiled a much-needed cool-down for the first time in six months. This positive news sent ripples of joy through the bond market, leading to a drop in bond yields. Since mortgage rates and bond yields are closely intertwined, this translates to lower borrowing costs for hopeful homeowners.
Insights from the Experts
Industry leaders offer a multitude of reasons for the predicted decline. Here are some key takeaways gleaned from their expertise:
- Inflation on the Back Burner? Experts like Melissa Cohn and Allison Kaminaga underscore the significance of the recent CPI report in potentially influencing the Federal Reserve's (Fed) decision on future rate cuts. While a single report might not be enough to trigger a policy shift, it's a positive indicator that could pave the way for potentially lower rates later in the year.
- The Treasury Yield Tide Ken H. Johnson emphasizes the role of ten-year Treasury yields, which are currently on a downward trajectory due to the Fed's slowed balance sheet runoff. This downward trend is expected to pull mortgage rates down with it.
- Riding the Market Wave Dan Green sheds light on the prevalence of algorithmic trading in the market, where momentum is currently pushing mortgage rates down. He advises potential borrowers to capitalize on this favorable wave.
A Divergent Viewpoint
While the majority predict a decline, a small contingent of experts believe rates might hold steady or even nudge upwards. Michael Becker reasons that after a significant drop in recent weeks, rates might consolidate at their current level before continuing their descent. Bennie Waller points to the potential impact of weaker mortgage demand and a hotter-than-expected producer price index (PPI) data as factors that could keep rates from dipping further.
The Takeaway: Stay Informed, Make Smart Decisions
The outlook for mortgage rates next week appears promising, with a strong majority of experts predicting a decline. This is a welcome trend for potential homebuyers. However, it's crucial to remember that the housing market is a dynamic entity, influenced by a complex interplay of factors.
Staying informed about economic data and consulting with a qualified mortgage professional are essential steps to secure the best possible rate for your specific situation. By understanding the current landscape and the reasoning behind the predictions, you can make well-informed decisions on your path to homeownership.
Mortgage Rate Predictions for the Next Month (June 2024)
The housing market continues to grapple with fluctuating mortgage rates, leaving many potential homebuyers wondering: will rates go down in June?
In 2023, the 30-year fixed-rate mortgage saw a rollercoaster ride, dipping as low as 6.09% and soaring as high as 7.79%. This volatility stemmed from the Federal Reserve's battle against inflation and jitters in the banking sector following the collapse of Silicon Valley Bank.
Economic uncertainty and the ongoing debt ceiling debate might push the Fed to maintain current interest rates, or even raise them slightly, to curb inflation. However, with a potential recession looming, some experts believe we may have already witnessed the peak of this rate cycle.
Let's explore what some leading mortgage professionals predict for the next month:
Moderate Rates Expected
- Craig Berry (Acopia Home Loans): Berry anticipates rates to plateau. He cautions that the Fed's planned actions in June to regulate money flow could initially cause a slight rise, followed by a potential decrease later in the summer.
- Molly Boesel (CoreLogic): Boesel believes rates will hold steady due to persistent inflation. She forecasts the 30-year rate to remain around the low-7% range in June.
- Ralph DiBugnara (Home Qualified): DiBugnara interprets the Fed's recent stance as a sign of potential rate cuts later in 2024. He predicts stable rates in June, with a possibility of a decrease towards the year's end.
- Danielle Hale (Realtor.com): Hale highlights inflation as the primary driver of mortgage rates. She expects rates to stabilize in June, with a possible downward trend towards 6.5% by year-end, contingent on falling inflation.
A Potential Rate Drop
- Odeta Kushi (First American): Kushi sees recent dips in mortgage rates as a sign of potential further reductions, assuming inflation falls towards the Fed's target. However, she acknowledges that persistent inflation could lead the Fed to maintain higher rates.
Rates Likely to Hold
- Rick Sharga (CJ Patrick Company): Sharga believes a Fed rate cut in June is highly improbable, and consequently, significant mortgage rate reductions are unlikely. He predicts rates will hover between 7.0-7.5% in June and the foreseeable future.
The Takeaway
The overarching theme from these experts is that mortgage rates are likely to remain relatively stable in June, potentially with some slight fluctuations. While a significant drop seems unlikely, some foresee the possibility of a decrease later in 2024 if inflation subsides.
Beyond June, predictions for mortgage rates extend into the coming months. With inflation showing signs of cooling and the Federal Reserve adjusting its policies accordingly, there's cautious optimism among experts that mortgage interest rates may gradually descend in 2024.
As of March 21, the average 30-year fixed-rate mortgage stands at 6.87%, according to Freddie Mac. Looking further ahead, projections for the second quarter of 2024 suggest a potential dip in rates. While forecasts vary slightly among major housing authorities, there's consensus that rates may finish below the current average, with predictions ranging from 6.3% to 6.6%.
Housing Authority | 30-Year Mortgage Rate Forecast (Q2 2024) |
Fannie Mae | 6.30% |
National Association of Home Builders | 6.39% |
Mortgage Bankers Association | 6.60% |
National Association of Realtors | 6.60% |
Wells Fargo | 6.60% |
Average Prediction | 6.50% |
Current Mortgage Interest Rate Trends
Month | Average 30-Year Fixed Rate |
April 2023 | 6.34% |
May 2023 | 6.43% |
June 2023 | 6.71% |
July 2023 | 6.84% |
August 2023 | 7.07% |
September 2023 | 7.20% |
October 2023 | 7.62% |
November 2023 | 7.44% |
December 2023 | 6.82% |
January 2024 | 6.64% |
February 2024 | 6.78% |
March 2024 | 6.82% |
April 2024 | 6.99% |