Borrowing costs have fallen over the last two months.
Mortgage rates are ringing in the new year much lower than their near-8% peak this past fall. The 30-year fixed-rate mortgage has decreased for the past nine weeks, though breaking for a slight uptick this week to reach 6.62%, Freddie Mac reports.
“The overall trajectory of mortgage interest rates in 2024 is expected to decrease,” says Jessica Lautz, deputy chief economist at the National Association of REALTORS®. “While mortgage interest rates ease, there will be weekly shifts in the average rate. As home buyers move forward into the spring market, staying closely attuned with a mortgage broker can help them navigate the best rate.”
At this week’s rate of 6.62%, a monthly mortgage payment for a $400,000 home would translate to $2,048, Lautz says. That is considerably lower than in the fall, when a rate of 7.12% translated to a monthly mortgage payment of $2,221.
Between late October and mid-December 2023, the 30-year fixed-rate mortgage plummeted more than a percentage point, says Sam Khater, Freddie Mac’s chief economist. “Given the expectation of rate cuts this year from the Federal Reserve, as well as receding inflationary pressures, we expect mortgage rates will continue to drift downward as the year unfolds. While lower mortgage rates are welcome news, potential home buyers are still dealing with the dual challenges of low inventory and high home prices that continue to rise.”
NAR is predicting that the 30-year fixed-rate mortgage will average 6.3% in 2024.
Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 4:
- 30-year fixed-rate mortgages: averaged 6.62%, rising slightly from last week’s 6.61% average. A year ago, 30-year rates averaged 6.48%.
- 15-year fixed-rate mortgages: averaged 5.89%, dropping from last week’s 5.93% average. Last year at this time, 15-year rates averaged 5.73%.
Source: nar.realtor
