Current:Home > FinanceAre mortgage rates likely to fall in 2024? Here's what Freddie Mac predicts. -Dynamic Wealth Solutions
Are mortgage rates likely to fall in 2024? Here's what Freddie Mac predicts.
View
Date:2025-04-14 12:57:03
It's been a tough year so far for homebuyers, who are facing the double whammy of high housing prices and rising loan rates. Unfortunately, the remainder of 2024 may not offer much relief, at least according to economists at mortgage buyer Freddie Mac.
"[W]e expect mortgage rates to remain elevated through most of 2024," Freddie Mac said in a Thursday housing outlook report. "These high interest rates will prompt prospective buyers to readjust their housing expectations, but we anticipate housing demand to remain high due to favorable demographics, particularly in the starter home segment."
Rates on a 30-year fixed mortgage are hovering above 7%, close to their highest point in more than 20 years. With inflation remaining stubbornly high, the Federal Reserve is expected to delay cutting its benchmark rate, and Freddie Mac said it's predicting that the central bank will only make one cut in 2024 — with that occurring toward the end of the year.
The Federal Reserve has said it would rather keep rates high until inflation cools to about 2% on an annual basis, rather than risk cutting too early and fueling another round of price spikes. But as a result, borrowers have been whalloped with higher loan costs for everything from credit cards to mortgages.
It's not only mortgage rates that have made homebuying this spring a tough proposition for many Americans, particularly those in middle- or low-income brackets. Tight inventory and rising home prices are pushing some buyers out of the market, with the median U.S. home sale price hitting a record $383,725, according to Redfin.
The cost of homeownership has grown so steep that it now takes a six-figure income to afford the typical home in the U.S., according to Zillow. For the first time in roughly two years, home prices did not fall in any of the nation's largest metro areas in April, Redfin said in a separate report.
Higher mortgage rates have also had an impact on some current homeowners. Because many bought or refinanced their properties in the first years of the pandemic — when rates dropped below 3% — some are wary of selling their properties if it means taking on a new mortgage at today's rates.
Hesitant sellers combined with new construction failing to keep up with housing demand has created national shortage in both existing and new homes for sale, economists have said.
"Overall, tight inventory and higher for longer (mortgage) rates are still key barriers to home sale volumes," Freddie Mac said. "Mortgage rates above 7% continue to price out many prospective homebuyers and sellers have less incentive to sell."
- In:
- Home Prices
- Housing Help
- Mortgage Rates
- Home Sales
Khristopher J. Brooks is a reporter for CBS MoneyWatch. He previously worked as a reporter for the Omaha World-Herald, Newsday and the Florida Times-Union. His reporting primarily focuses on the U.S. housing market, the business of sports and bankruptcy.
TwitterveryGood! (93462)
Related
- Can Bill Belichick turn North Carolina into a winner? At 72, he's chasing one last high
- Third channel to open at Baltimore port as recovery from bridge collapse continues
- New EPA rule says over 200 US chemical plants must reduce toxic emissions linked to cancer
- Here are the questions potential jurors in Trump's hush money trial will be asked
- Which apps offer encrypted messaging? How to switch and what to know after feds’ warning
- Key question before US reveals latest consumer prices: Is inflation cooling enough for the Fed?
- Inflation runs hot for third straight month, driven by gas prices and rent
- Conjoined twins Abby, Brittany Hensel back in spotlight after wedding speculation. It's gone too far.
- Dick Vitale announces he is cancer free: 'Santa Claus came early'
- 6 ex-Mississippi officers in 'Goon Squad' torture case sentenced in state court
Ranking
- This was the average Social Security benefit in 2004, and here's what it is now
- Assistant principal charged with felony child abuse in 6-year-old's shooting of teacher
- My job is classified as salaried, nonexempt: What does that mean? Ask HR
- Ralph Puckett Jr., awarded Medal of Honor for heroism during the Korean War, dies at 97
- Highlights from Trump’s interview with Time magazine
- Former assistant principal charged with child neglect in case of 6-year-old boy who shot teacher
- Tesla to unveil robotaxi self-driving car in August, Elon Musk says
- Ford recalls nearly 43,000 SUVs due to gas leaks that can cause fires, but remedy won’t fix leaks
Recommendation
SFO's new sensory room helps neurodivergent travelers fight flying jitters
What causes nosebleeds? And why some people get them more than others.
Right to abortion unlikely to be enshrined in Maine Constitution after vote falls short
Drake Bell “Still Reeling” After Detailing Abuse in Quiet on Set Docuseries
Small twin
Black-owned children's bookstore in North Carolina is closing over alleged threats
Pennsylvania makes a push to attract and approve carbon capture wells
This Is Not a Drill! Save Hundreds on Designer Bags From Michael Kors, Where You Can Score up to 87% Off