Gain expert insights into navigating mortgage rate fluctuations.

When will mortgage interest rates decrease? While numerous organizations provide projections, such as Fannie Mae, the Mortgage Bankers Association, and the National Association of Realtors, the future of these rates remains uncertain. Today, we’ll delve into the current forecasts and the implications of waiting for rates to decrease.

At 0:24 in the video, you’ll see a chart that shows the predictions of the industry experts. According to the chart, rates averaged around 7.4% in Q4 of 2023 and dropped to approximately 6.5% in Q3 of 2024.

We’re looking at a potential 1% decrease over the next 12 months based on these forecasts. However, it’s crucial to note that these projections are not guaranteed, and waiting for interest rates to decline might prove costly. As demonstrated in this chart, the average 30-year fixed mortgage rate in 1971 stood at 7.56%. In just a couple of years, it spiked to 8.5%, marking a significant increase at that time.

“Relying solely on the anticipation of lower rates is not advisable.”

There were likely many individuals who decided to wait until rates dropped before considering a home purchase. Following that strategy, they would have had to wait 20 years before rates returned to 7.56%, which occurred only in March of 1993. This extreme example highlights the risk of solely banking on rates dropping; however, we don’t anticipate such a lengthy wait for rates to decrease.

Relying solely on the anticipation of lower rates is not advisable. Those who waited missed out on potential equity growth, price appreciation, and the realization of their life plans, such as moving into a new home. So, what are the key takeaways? First, while there are predictions for lower interest rates in 2024, nothing is guaranteed.

Secondly, making a significant life decision based solely on an uncontrollable factor like timing interest rate drops is not recommended. Lastly, if securing a 6.5% interest rate is the priority, there are methods available today, like interest rate buydowns, to achieve that rate without waiting for potentially uncertain future drops.

Hence, if you have any inquiries regarding these figures or methods to secure lower interest rates, feel free to call or email us. We’re more than happy to assist you.