Mortgage Interest Rates Update ๐๐
As the new year began, mortgage interest rates remained almost unchanged. Following a gradual decline over 9 weeks, rates experienced a slight uptick from 6.61% to 6.62%. This minimal weekly change translates to just a $2 increase in the typical monthly payment for a $400,000 home, totaling $2,048.
The impact on monthly payments is negligible, considering the median NAR existing-home price of $387,600 in November and a median new sales price of $434,700.
Looking ahead to 2024, the overall trajectory for mortgage interest rates is expected to decrease. Despite weekly fluctuations, the easing trend in mortgage rates will likely continue. ๐๐ฐ
Where Do I Think Mortgage Rates Are Heading?
Over the past year, mortgage rates spiked up in response to economic uncertainty, inflation, and more. But thereโs an encouraging sign for the market and mortgage rates. Inflation is moderating, and hereโs why this is such a big deal if youโre looking toย buy a home.
When inflation cools,ย mortgage ratesย generally fall in response. Thatโs exactly what weโve seen in recent weeks. And, now that theย Federal Reserveย has signaled theyโre pausing their Federal Funds Rate increases and may even cut rates in 2024, experts are even more confident weโll see mortgage rates come down.
Danielle Hale, Chief Economist atย Realtor.com,ย explains:
โ. . . mortgage rates will continue to ease in 2024 as inflation improves and Fed rate cuts get closer. . . .ย a key factor in starting to provide affordability relief to homebuyers.โ
As an article from theย National Association of Realtorsย (NAR)ย says:
โMortgage rates likely have peaked and are now falling from their recent high of nearly 8%.ย . . . This likely will improve housing affordability and entice more home buyers to return to the market . . .โ
No one can say with absolute certainty where mortgage rates will go from here. But the recent decline and the latest decision from theย Federal Reserveย to stop their rate increases, signals thereโs hope on the horizon. While we may see some volatility here and there,ย affordabilityย should improve as rates continue to ease.
Some recent posts about mortgages and housing:
Why Mortgage Rates Could Continue To Decline
Thinking About Buying a Home? Ask Yourself These Questions
Freddie Mac Weekly Mortgage Market Update
Instant Reaction to Mortgage Rates by NAR’s Dr. Jessica Lautz
Bottom Line
If youโre thinking aboutย buying a home, you need to know whatโs expected with home prices and mortgage rates. While no one can say for certain where theyโll go, making sure you have the latest information can help you make an informed decision. Letโs connect so you can stay up to date on whatโs happening and why this is such good news for you.