What Mortgage Rate Should You Wait For?

Over the past few years, mortgage rates have been a major factor in shaping housing affordability. However, there's now a glimmer of hope for prospective homebuyers. In 2024, we’re seeing mortgage rates begin to ease, reaching their lowest levels so far this year. If you’re contemplating buying a home, you might be asking yourself: how much lower could rates go? Let’s delve into expert insights and explore what the future might hold.

Forecasting Mortgage Rate Trends in 2024

The consensus among industry experts is that mortgage rates are likely to continue their downward trajectory, provided that inflation remains in check and the economy cools. While fluctuations are expected as new economic data emerges, it's crucial to maintain perspective on the overall trend rather than getting caught up in short-term volatility.

Since May, mortgage rates have dropped by about a full percentage point. Looking ahead, many experts, including those at Realtor.com, anticipate that rates could dip into the low 6% range in the months to come. According to Realtor.com, “Mortgage rates have been revised slightly lower as signals from the economy suggest that it will be appropriate for the Fed to begin to cut its Federal Funds rate in 2024. Our yearly mortgage rate average forecast is down to 6.7%, and we revised our year-end forecast to 6.3% from 6.5%.”

Sam Khater, Chief Economist at Freddie Mac, adds, “The decline in mortgage rates does increase prospective homebuyers’ purchasing power and should begin to pique their interest in making a move.” This sentiment is echoed across the industry, with experts generally optimistic about the potential for rates to stabilize or even decline further in 2024.

Determining Your Ideal Mortgage Rate

So, what does this mean for your home-buying plans? If you’ve been waiting for rates to drop before purchasing a home, now may be the time to set your sights on a target rate. Consider the expert projections alongside your personal financial situation to decide when you’ll feel comfortable re-entering the market. Mark Zandi, Chief Economist at Moody’s Analytics, advises, “Patience is key. Waiting for the right rate that aligns with your financial goals can make a significant difference in your long-term investment.”

To move forward, ask yourself: what rate would make you confident enough to start your home search? Whether it's 6.25%, 6.0%, or a rate just below 6%, having a specific target in mind will help you stay focused and prepared. You don’t need to track rates obsessively—work with a trusted real estate professional who can keep you updated and help you act when the market conditions align with your goals.

The Bottom Line

If higher mortgage rates have put your home-buying plans on hold, it’s time to reassess and identify the rate that would encourage you to take the next step. With expert guidance and a clear plan, you’ll be ready to make your move as soon as your ideal rate is within reach. Remember, while timing is important, aligning your decision with both the market and your personal financial health is key to making a sound investment.

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This article was inspired by content from KeepingCurrentMatters.com.

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