What Is the 30-Year Mortgage Prediction for 2024?

If you have been wading your way through rate hikes, unpredictable economic growth and ups and downs in the housing market, some good news might be just what the chief economist ordered. Fed Chair Jerome Powell gave many positive and negative economic outlooks in 2023. However, what does economic data have in store for 2024?

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How Fed Interest Rates Affect Your Mortgage: Quick Take 

If you have ever wondered how the Federal Reserve rates directly affect your mortgage payments you are not alone. Here are a few key takeaways:

• When Fed officials cut rates it generally puts pressure on mortgage rates to move downward.
• At the beginning of 2024, the current national average APR for the benchmark 30-year fixed mortgage rose to 7.16%.
• Some experts are predicting that rates could even drop below 6% on some 30-year fixed-rate mortgages or hover between 6.1% and 6.9%.
• When inflation goes up, the Fed hikes interest rates so when you borrow money it is more cost-prohibitive. This also helps slow economic growth. 
• When mortgage rates go up so do your monthly payments. For example, a 1% increase in the interest rate on your $300,000 mortgage would result in you paying about $175 more a month on your mortgage. 
• Lenders will reduce mortgage rates when the Fed is confident in the economy and it cuts interest rates. 

Mortgage Rate Predictions for 2024

Volatility could continue in 2024 as expert economists have predicted some potential ups and downs. Though there are no guarantees about where the stock, real estate or labor markets will go, there are some educated guesses as to what mortgage rates will do. Here are some key takeaways:

• There is a chance that average 30-year mortgage rates will dip beneath 6% and run between 5.9% and 7.3% throughout the year. 
• The economy, which saw its fair share of blows in 2023, is expected to balance out a bit more in 2024 which could stabilize inflations and allow the Fed to start lowering the federal funds rate.
• Before it can start cutting rates, the Fed needs the economy to demonstrate it isn’t set for a downturn but rather has regulated for some time. 
• The Mortgage Bankers Association, or MBA, estimates that mortgage rates will fall from 7% in the first quarter of 2024 to 6.1% by the fourth quarter. 
• 2023 wasn’t a great time for homebuyers, but the 2024 housing market looks to be more promising. Hopefully, better rates and options will present themselves in the second half of the year. 

Final Take To GO: When Will Mortgage Rates Go Down?

The bottom line is that a soft landing sounds infinitely more comforting than other options when staring at certain economic predictions for the upcoming year. 2023 was anything but steady when it came to interest rate hikes and the trickle effect of what that would do to your loan and mortgage options left a lot to be desired. Fortunately, though 2024 has been anything but perfect, the year seems to be painting a more pleasant financial picture.