How Low Will Home Loan Rates Fall in 2024?
Who’s Watching the Rates
A number of industry and industry-related publications have weighed in on where the economy and the housing market may be headed in the new year. They include Business Insider, the National Association of Realtors, Fannie Mae, and the Federal Housing Finance Agency.
What do these entities say about the coming year for home loan rates and house hunting?
Fannie Mae on Mortgage Rates in 2024
According to Fannie Mae, 30-year fixed rate mortgages could drop as low as 6.1% in the new year. The Mortgage Bankers Association or MBA agrees, predicting 30-year fixed rates could hit 6.1% by the end of 2024.
National Association of Home Builders (NAHB)
USA Today reports that NAHB predicts 2024 will bring ”a gradual decline for mortgage rates as the economy slows” thanks to delayed effects of “tighter monetary policy.”
National Association of Realtors
Representatives from the NAR have gone on record saying that while a housing market recovery may be in the works, no one should expect rates to dip to the historic lows we saw earlier in the decade. NAR predictions for 2024 include a slight reduction in rates to “near 6%” is possible by spring 2024.
Should You Wait to Buy a Home in 2024?
Some can afford to wait, others are forced to act due to changes in family size, career, or other variables. Many plan to buy in 2024 using an FHA adjustable rate mortgage, focusing on the refinancing option when mortgage rates begin to reach their predicted lower levels.
You can combine other strategies with an adjustable rate mortgage. Pre-paying on the loan, buying discount points, and paying more upfront instead of financing closing costs can all contribute to a more affordable mortgage over the long term.
If you plan to buy a home but do not keep it long-term, ask your participating FHA lender about the smartest approach. In such cases, paying for discount points or making a larger down payment may make less sense than it does when planning to keep the home long-term.
Sometimes It Pays to Refinance
Don't Forget Your Closing Checklist
Your Home Loan is Called a Mortgage
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