What Mortgage Rate Are You Waiting For? Your Guide to Understanding Mortgage Trends

Mortgage rates have had a significant impact on housing affordability in recent years. However, there is a silver lining on the horizon: mortgage rates have started to come down. According to Freddie Mac, rates recently reached their lowest point in 2024 (see graph below).

For potential homebuyers, this raises an important question: How much lower are mortgage rates going to go? Understanding expert predictions and the broader economic trends can help you make an informed decision about when to re-enter the housing market.

Expert Projections for Mortgage Rates in 2024

Mortgage rates are expected to continue trending downward as inflation and the economy cool. That said, there will still be some fluctuations in the market. While the path may not be perfectly smooth, the overall outlook for mortgage rates is positive.

As of now, mortgage rates have dropped by nearly a full percentage point since their peak in May. The consensus among experts is that rates could reach the low 6% range in the coming months, but it all depends on the Federal Reserve’s actions and the overall state of the economy.

Recent revisions to mortgage rate forecasts have been more optimistic. Realtor.com, for instance, revised their 2024 forecast, lowering their year-end projection to 6.3% from 6.5%. They believe the Federal Reserve may begin to reduce the Federal Funds rate, which could result in even lower mortgage rates.

What Does This Mean for You?

If you’ve been waiting for mortgage rates to decrease before making a move, the good news is that rates are already trending lower. However, it’s essential to decide at what point you feel comfortable entering the market. Experts predict rates in the low 6% range, but your personal target rate will depend on your budget and homebuying goals.

As Sam Khater, Chief Economist at Freddie Mac, states, "The decline in mortgage rates increases prospective homebuyers’ purchasing power and should begin to spark interest in moving forward."

Know Your Ideal Mortgage Rate

The key takeaway is to determine the mortgage rate that aligns with your financial goals. Whether it’s 6.25%, 6.0%, or 5.99%, knowing your target rate helps you plan your next steps. Once you’ve set that target, you don’t need to track rates yourself—let a local real estate professional keep you informed and ready to act when your target rate is reached.

Bottom Line

If you’ve held off on moving due to higher mortgage rates, it’s time to reconsider your options. Set a target mortgage rate and stay connected with a trusted real estate agent who can notify you when rates hit your desired number. Whether you’re buying your first home or upgrading to a new one, the right mortgage rate can make all the difference.