A Look Back at 2023Factors Influencing Mortgage Rates
- The Federal Reserve continued to implement rate hikes, aiming to address the highest inflation in four decades.
- As part of the Fed’s strategy, there was a recent decision to hold rates, accompanied by signals of potential future cuts.
Impact to the Housing Market
- High rates, coupled with low housing inventory and persistent home prices, led to many potential buyers staying on the sidelines.
Looking Ahead to 2024Future Predictions
- The Federal Reserve plans a total of 75 basis point cuts to the Fed rate in 2024, spread across three stages.
- Economic data, such as unemployment, wages and inflation indicators, will influence the timing of rate cuts.
- Economists project that mortgage rates could drop to around 6.5% or lower in 2024, as the Federal Reserve responds to cooling inflation.
Housing Inventory Outlook
- Experts do not anticipate a significant improvement in available homes for sale in the coming year.
- There is an anticipation of more buyers returning to the market as rates gradually decline, leading to increased competition and the potential for a surge in home prices.
Information provided by Guaranteed Rate Affinity
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