Current:Home > ScamsAre mortgage rates likely to fall in 2024? Here's what Freddie Mac predicts. -InvestTomorrow
Are mortgage rates likely to fall in 2024? Here's what Freddie Mac predicts.
View
Date:2025-04-16 18:28:10
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! (7616)
Related
- Drones warned New York City residents about storm flooding. The Spanish translation was no bueno
- Kevin Costner makes surprising 'Yellowstone' revelation after drama-filled exit
- TikTok’s Conjoined Twins Carmen and Lupita Slam “Disingenuous” Comments About Their Lives
- A Washington man pleads not guilty in connection with 2022 attacks on an Oregon electrical grid
- 51-year-old Andy Macdonald puts on Tony Hawk-approved Olympic skateboard showing
- 2 inmates dead after prison van crashes in Alabama; 5 others injured
- Kourtney Kardashian Reveals Why She Pounded Her Breast Milk
- Vice President Kamala Harris meets with families of hostages held by Hamas
- US Open player compensation rises to a record $65 million, with singles champs getting $3.6 million
- Man accused of lighting fire outside Bernie Sanders’ office had past brushes with the law
Ranking
- Oklahoma parole board recommends governor spare the life of man on death row
- SMU suspends CB Teddy Knox, who was involved in multi-car crash with Chiefs' Rashee Rice
- Ex-Shohei Ohtani interpreter negotiating guilty plea with federal authorities, per report
- O.J. Simpson Trial Prosecutor Marcia Clark Reacts to Former NFL Star's Death
- $1 Frostys: Wendy's celebrates end of summer with sweet deal
- Homebuyers’ quandary: to wait or not to wait for lower mortgage rates
- 1 killed, 5 injured in shooting in Northeast Washington DC, police search for suspects
- Another roadblock to convincing Americans to buy an EV: plunging resale values
Recommendation
British swimmer Adam Peaty: There are worms in the food at Paris Olympic Village
Tennessee GOP senators OK criminalizing helping minors get transgender care, mimicking abortion bill
A Washington man pleads not guilty in connection with 2022 attacks on an Oregon electrical grid
Former Arizona Gov. Doug Ducey says the abortion ruling from justices he chose goes too far
Boy who wandered away from his 5th birthday party found dead in canal, police say
Mama June Shares Why Late Daughter Anna “Chickadee” Cardwell Stopped Cancer Treatments
Caitlyn Jenner Shares Jaw-Dropping Message After O.J. Simpson's Death
HELP sign on tiny Pacific island leads to Coast Guard and Navy rescue of 3 mariners stranded for over a week