So where do we go from here? Here’s what the experts are saying:
Fannie Mae expects the 30-year mortgage rate to average 6.6% in 2023 and 6.1% in 2024.. The mortgage giant does not expect rates to dip below 6% until the fourth quarter of 2024.
Mortgage Bankers Association‘s July Mortgage Finance Forecast has a more optimistic outlook, with the 30-year mortgage rate falling to 5.9% by the end of 2023. Conditions improve in 2024, with the industry group projecting rates to fall below 5% in the fourth quarter.
Wells Fargo, in its latest U.S. Economic Outlook, put the 30-year conventional mortgage rate at 6.7% in the third quarter of 2023, pulling back somewhat to 6.45% in the fourth quarter. The bank’s forecasting group predicts that rates will fall below 6% in the second quarter of 2024.
Morningstar’s economists project that the average 30- year fixed mortgage rate will average 6.25% in 2023, 5.0% in 2024, and 4.0% in 2025
Goldman Sachs projects that the 30-year fixed mortgage rate will end 2023 at 6.4%. In 2024, Goldman Sachs expects the 30-year ﬁxed mortgage rate will average 5.9%
The National Association of REALTORS forecasts that the 30-year fixed mortgage rate will slide to 6.4% before the end of 2023, and then to 6.0% in 2024
Moody’s Analytics is projecting that the 30-year fixed mortgage rate will average 6.5% through most of 2023. Moody’s Analytics chief economist Mark Zandi expects that to slide to 6.0% by the end of 2024, and then hit 5.5% in 2025
Economists at Realtor.com believe the 30-year ﬁxed mortgage rate will start 2024 at 6.1%
The bottom line?
The overall consensus among these large financial firms is that rates will come down in 2024. Some predict as early as 1s quarter of 2024 and rates dropping to as low as 4.9%.
Personally, I’m not buying it. I’m not an economist, but I do know there are few short-term trends in real estate. Rates have been going up for some time, and if I had to bet, I’d say they’re going to keep going up for some time to come.