By Lisa Sturtevant, PhD
Chief Economist, Bright MLS
Freddie Mac reported that the average rate on a 30-year fixed rate mortgage ticked up to 6.69% during the week ending January 25, 2024. Rates are down from the more than two-decade highs hit at the end of October, but for the past four weeks, average rates have stabilized a bit.
Rates are projected to fall throughout 2024, although, during the early part of the year, expect some bumpiness in rates as new economic data are released and more buyers get back into the market. However, the overall outlook for mortgage rates in 2024 suggests some rate drops, with Bright MLS forecasts predicting rates to hit 6.2% by the fourth quarter.
Falling rates are a good sign for homebuyers. At a 7% interest rate, the monthly payment on a $400,000 home would be around $2,900. If rates fell to 6%, the monthly payment for that home would be about $2,700.
Factors Beyond the Rate
Prospective homebuyers are eagerly watching mortgage rates as they decide when—or if—to get into the market. But it’s not all about rates. In this still-competitive housing market, buyers will continue to find tight inventory.
To stay within budget, home shoppers will need to work with a real estate professional who understands local market conditions and can help talk through potential compromises and trade-offs. Buyers may need to consider opting for a townhome instead of a single-family home, looking at communities in different parts of the market, and considering homes with a rental stream.
Looking for an experienced local agent? Find one on Nestfully.