U.S. mortgage rates have fallen to their lowest level since May, with the 30-year mortgage rate falling from last week’s 6.67% to 6.61% according to data from Freddie Mac. This is a ninth consecutive weekly decline and a drop of more than a full percentage point from 7.79% in October.
Still, while the decline in mortgage rates is expected to provide some relief to homebuyers, lower rates are expected to push prices higher. “A drop in rates makes it more likely that prices will start heading higher earlier than normal in 2024, and higher prices will erase some of the benefits of lower mortgage rates,” Keith Gumbinger, vice president of HSH.com, observed.
The Federal Reserve is expected to cut interest rates three times throughout 2024. While economists at Realtor.com said they expect rates to average 6.8% for most of the year before declining to 6.5% later in the year, the National Association of Realtors forecasted that rates will average 6.3% in 2024.