Low Mortgage Rates Are Here!
Market Update Kathleen Magat October 3, 2024
Market Update Kathleen Magat October 3, 2024
Fed Chair Jerome Powell recently announced that the central bank will begin cutting the fed funds rate, starting with a 0.50 percentage point (50 bps) reduction this month. Additionally, the Fed signaled that more cuts are likely during their final two meetings of the year in November and December, with more expected next year.
So, what does this mean for mortgage rates?
While the Fed doesn’t directly control long-term rates, including the 30-year fixed mortgage rate, their policy decisions do influence the market. We’ve already seen the average 30-year fixed rate, tracked by Freddie Mac, drop from 7.79% in October 2023 to 6.20% last week, thanks to softening in the labor market and the anticipated Fed rate cuts.
Industry experts from the Mortgage Bankers Association, Wells Fargo, Fannie Mae, and Moody’s all expect mortgage rates to drop a little more as the Fed’s actions stabilize the market and narrow the spread.
Moody’s chief economist Mark Zandi forecasts the 30-year fixed rate will approach 6.0% by the end of this year and settle around 5.5% by the end of 2025. This decline is expected as the Fed eases policy, the yield curve normalizes, bond volatility reduces, and prepayment risks level off.
Lower mortgage rates could mean more buyer demand. To understand how this could impact your future real estate plans, don’t hesitate to call me immediately.
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Kathleen is the top real estate agent in her brokerage. She has built her business building long-term relationships and being a resource for her clients before, during and after the transaction. As a member of the Meta Realty team, she offers her clients almost two decades of real estate experience.
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