The National Association of Realtors® (NAR) has released its predictions for the 2024 housing market, and there’s some good news for prospective home buyers: mortgage rates are expected to fall. After reaching a peak of over 7.79% in late 2023, NAR chief economist Lawrence Yun forecasts that the average 30-year fixed mortgage rate will settle around 6.3% in 2024.
This decrease is largely due to the anticipated slowdown in the Federal Reserve’s (Fed) rate hike campaign. Recently, the Fed indicated that they will hold the Fed Funds Rate steady for now and cut rates three times in 2024. Needless to say, this is welcomed news for both home buyers and sellers and this should result in a lower mortgage rate overall.
The Fed has been aggressively raising interest rates in an effort to combat inflation, and this has put upward pressure on mortgage rates. However, with inflation showing signs of cooling, the Fed is expected to ease up on the brakes in 2024.
A lower mortgage rate = increased home sales
The decline in mortgage rates is expected to have a positive impact on the housing market. Yun predicts that existing-home sales will rise by 13.5% in 2024, as more buyers are able to afford to enter the market.
“The question is when are rates going to come down,” Yun said. Furthermore, Yun anticipated mortgage rates in 2024 could fall to between 6 or 7 percent by the spring.
Of course, there are still some uncertainties in the outlook. The Fed’s actions will depend on how quickly inflation comes down, and the economy could be hit by unforeseen events. But overall, the NAR’s forecast suggests that 2024 could be a better year for home buyers.
Other factors that could impact mortgage rates
- The job market. If the job market weakens, it could lead to lower demand for homes, which could put downward pressure on rates.
- The stock market. If the stock market crashes, it could lead to investors seeking safer investments, such as bonds. This could drive up bond prices and lower mortgage rates.
- Geopolitical events. Wars, natural disasters, and other events can have a significant impact on the economy and financial markets. These events could cause mortgage rates to fluctuate.
It’s important to remember that these are just predictions. The actual course of the housing market in 2024 is uncertain. But the NAR’s forecast suggests that there are reasons to be optimistic. If you’re thinking about buying a home, 2024 could be a good year to do it.
When thinking about buying a home in 2024, there are a few things you can do to prepare:
- Get your finances in order. Make sure you have a good credit score and a healthy down payment.
- Shop around for a mortgage. Don’t just accept the first rate you’re offered. Compare rates from multiple lenders to find the best deal.
- Be patient. The housing market may take some time to recover from the recent slowdown. But if you’re willing to be patient, you could find a great deal on a home in 2024.
Are you looking to buy or sell real estate in South Florida? We can help! Contact Natasha at Live South Florida Realty, Inc. today. Also, be sure to download the free Florida Home Search app for your mobile device and take the power of the South Florida MLS with you.