As we bid farewell to November, the rollercoaster ride of mortgage rates has taken an interesting turn. After reaching a 2023 high of 7.79% in October, rates experienced a notable descent over November, settling at 7.22%, according to the latest weekly data from Freddie Mac. Let's unpack the implications of this shift and how it's shaping the housing landscape.
October had brought a bit of turbulence to the mortgage rate landscape, with rates soaring to the highest point in 2023. However, November saw a change in direction, offering a welcome descent to 7.22%. This shift brings a sigh of relief to those closely watching the market, suggesting a potential easing of the recent upward trend.
From Forbes: Here is how some experts predict market conditions will affect the average 30-year, fixed-rate mortgage in 2024:
National Association of Realtors chief economist Lawrence Yun. “Mortgage rates look to head towards 7% in a few months and into the 6% range by the spring of 2024.”
RSM U.S. real estate senior analyst Crystal Sunbury. “Assuming no significant economic shocks, mortgage rates are likely to continue slowly easing over the next few months, to reach a 6% to 6.5% range by spring of 2024.”
Mortgage Bankers Association (MBA). MBA’s baseline forecast is for mortgage rates to end 2024 at 6.1% and reach 5.5% at the end of 2025 as Treasury rates decline and the spread narrows.
Bank of America head of retail lending Matt Vernon. “The Fed’s likely decision to cut rates in 2024 would be a key factor that could breathe new life into the housing market. However, it’s important to note that significant drops in mortgage rates might not happen in the early months of 2024. If any reductions occur, they are likely to be gradual, possibly beginning in the latter part of the year.”
Palisades Group chief investment officer and co-founder Jack Macdowell. “Our best guess is that mortgage rates will remain in the 7% to 7.25% range throughout Q1 2024. This view is based on the idea that inflation is trending positively toward the 2% target and the Federal Reserve is likely done raising interest rates in 2023.”
Ally Home president Glenn Brunker. “With the current mortgage rates pricing around 7.5% today, we can expect them to be nearing their top and begin their descent in the first half of 2024.”
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