By Jessica Lautz
CHICAGO – For the first time since August, interest rates for a 30-year fixed mortgage have dropped below 7%, hitting 6.95% this week. This brings the monthly mortgage payment for a home priced at $400,000 to $2,118. This is down from a recent high this Autumn of 7.79% and yields a monthly savings of $183 and $2,196 annually for the same $400,000 home.
The Fed indicated yesterday they will hold the Fed Funds Rate steady for now and cut rates three times in 2024. This is all welcome news for potential home buyers and sellers, as mortgage interest rates will decrease. NAR forecasts that mortgage interest rates will average 6.3% in 2024.
While the lock-in effect of higher mortgage rates has stalled the real estate market in 2023, the momentum is moving in the right direction for stronger sales activity in 2024. Will it be a traditional Spring real estate market, or will it start to heat up in the Winter months as rates decline? Let’s also hope the lower mortgage interest rates translate into stronger homebuilder activity, as inventory will be needed as buyers move from the sidelines. For serious buyers, the time is now to get your financial house in order, find a Realtor® and start your research. Maybe it won’t be a new home for the holidays, but Valentine’s Day is right around the corner.
© 2023 National Association of Realtors® (NAR)
