Towards the end of last year, the Federal Reserve announced that there would be at least three interest rate cuts in 2024, assuming that they will be in quarter percentage point increments. Now that inflation has seemed to cool down, what will interest rates look like this year? And when will they go down?
In a post-meeting conference with CNBC, a statement was made that “Fed officials see core inflation falling to 3.2% in 2023 and 2.4% in 2024, then to 2.2% in 2025. Finally, it gets back to the 2% target in 2026.”
A senior mortgage loan officer at Guild Mortgage, Aaron Gordon says that “Rates will stay in the 6.625% to 7.25% range” at the beginning of this new year. He knows rates will come down eventually but due to the stubbornness of inflation, he doesn’t see it happening right away.
Gordon also predicts that in the second half of the year in early summer, interest rates will go down to the low to mid-sixes to maintain balance and avoid a recession.
Here’s a statement from Jessica Lautz, Chief Economist & Vice President of NAR Research on December 28, 2023:
“Mortgage interest rates continued their decline this week and have hit the lowest level in six months since May 2023. [Nationally] mortgage rate are now at an average 6.61% easing from 6.67% last week.”
From the looks of it and predictions from mortgage experts, if you are a buyer in this market and are on the lookout for the best opportunity, wait it out a little longer and shoot for late spring or early summer to potentially lock in those lower interest rates. We recommend that you get preapproved now so then you know how much how you can buy and then be prepared for more houses to hit the market as move up homeowners list their houses on the market.
Of course, keep your eyes peeled for your dream home as some sellers may want to avoid bidding wars and have a clean, simple, and quick closing of their home. You never know when the perfect opportunity will arise. You may pay a little more for your home, however, with the predicted interest rates lowering and possibly even going down to around 2% in 2026, you may have the opportunity to refinance in the next couple of years or so.
We are always here to help you with your real estate questions and advice so don’t be a stranger and reach out to us at (515) 329-4667. We’d love to speak with you.
