Introduction: Todd Rusteberg
Other Sources: BusinessInsider.com, Molly Grace
Introduction:
My name is Todd Rusteberg and I am a licensed REALTOR with Keller-Williams Experience Realty based in the Chicagolond area. Weather you are looking to buy, sell or invest, I am happy to help you from start to finish. My passion is helping my clients find their dream home and help them thru each step of their Real Estate journey whether they are first time buyers, or they are looking for that perfect get away vacation home, or looking to downsize or move to a larger home for their growing family. Whatever your situation is, I can help.
As we look ahead to the mortgage market of 2024, there’s a growing sense of anticipation among homeowners and prospective buyers eager to discern whether mortgage rates will experience a dip. While early indications point toward a potential decrease, it’s crucial to temper expectations, recognizing that the rates may not revisit the unprecedented lows observed in 2020 and 2021.
Here is the current outlook for 2024 Interest Rate Expectations and predictions:
Current Scenario and Projections: Inflation and Federal Reserve rate hikes have propelled mortgage rates to a 20-year high. However, recent months have seen a notable decrease, and projections for 2024 indicate a further decline. The consensus among major forecasters is that rates will drop, with estimates ranging between 6.1% and 6.5%.
Homebuyers’ Dilemma: Despite the positive outlook, experts caution against waiting for rates to hit rock bottom. The current advice for homebuyers is to consider making a purchase now and exploring refinancing later to avoid heightened competition in the upcoming year.
Economic Factors at Play: The recent economic data, including the Consumer Price Index report for November, suggests a slowdown in inflation and a cooling economy. The Federal Reserve’s readiness to consider cutting the federal funds rate in the coming year is expected to alleviate upward pressure on mortgage rates.
Predictions for 2024: Forecasts from prominent entities provide insights into the expected trajectory of mortgage rates in 2024:
- Mortgage Bankers Association: 7.0% (Q1), 6.6% (Q2), 6.3% (Q3), 6.1% (Q4)
- Fannie Mae: 7.0% (Q1), 6.8% (Q2), 6.6% (Q3), 6.5% (Q4)
- National Association of Realtors: 7.5% (Q1), 6.9% (Q2), 6.5% (Q3), 6.3% (Q4)
While specific figures may vary, the general consensus is that mortgage rates will decrease in 2024, potentially reaching around 6% by the year’s end.
Long-Term Rate Outlook: While a return to the ultra-low rates of 3% is not currently on the horizon, experts acknowledge the possibility. However, such a scenario would likely hinge on extraordinary events similar to the economic impact of the COVID-19 pandemic.
Buyer Strategy: With rates currently at their highest in over two decades, the strategy for potential homebuyers is not necessarily to wait for further rate reductions. Over 90% of homeowners currently enjoy rates below 6%, and many below 4%. To avoid increased competition and rising home prices, Afifa Saburi, a capital markets analyst, suggests a proactive approach: “Would-be buyers that have the ability to buy can avoid a potentially competitive market by locking in a purchase now and taking advantage of a refinance in the future.”
A mortgage refinance, replacing an existing mortgage with a new one to secure a lower rate or monthly payment, becomes an attractive option. Buyers are encouraged to act now, securing a home purchase, and then exploring refinancing opportunities once rates witness a further decline. The key lies in thorough research and obtaining quotes from multiple mortgage refinance lenders to secure the most favorable terms.
For a no obligation assessment of your Real Estate needs, contact me Todd Rusteberg, Keller Williams Experience Realty at 773.960.7582 or [email protected].