House hunters are wondering about one thing: interest rates.
Many prospective homebuyers are questioning: “Will interest rates go down in 2024?”
Mortgage rates are still high and housing inventory is limited. The situation has caused some people to hit the pause button with their search. If you are concerned right now that you may not be able to buy a home due to the current state of the economy, things could change soon.
The Mortgage Bankers Association’s November 2023 Mortgage Finance Forecast predicts 30-year rates starting in 2024 at 7.1% and declining to 6.1% toward the end of the year.
According to Fannie Mae’s Housing Forecast for November, the average 30-year fixed rate during the first quarter of 2024 will be at 7.6%.
“The economy is now slowing from the otherwise robust first estimate of third-quarter growth,” said Douglas Duncan, Fannie Mae Senior Vice President and Chief Economist, in a statement on Nov. 1. “While many current owners with low mortgage rates will likely continue to be discouraged from listing their homes, we expect mortgage rates to trend modestly downward in 2024, which should help kickstart a gradual recovery in home sales into 2025.”
The National Association of Realtors also predicted that the 30-year mortgage rate will go under 7% in the second half of next year.
In the meantime, here are some items for your to-do list to improve your chances of achieving the goal of homeownership in 2024.
- Increase your credit score.
- Check your credit reports for accuracy and fix errors.
- Maintain a financially healthy debt-to-income ratio by reducing debt.
- Apply for first-time homebuyer programs to receive down payment assistance.
- Save at least 20% toward the down payment to avoid private mortgage insurance on conventional home loans.
The Consumer Financial Protection Bureau recommends homebuyers to shop around and get quotes from mortgage lenders to compare rates, decide on the type of loan, and have a preferred lender to negotiate a lower rate.
Do not let the current state of interest rates be a hindrance to buying a home. Forecasters are estimating that mortgages will peak near 7% or 8% and then go down to 5% or 6% by the end of 2024.