When Will Interest Rates Drop? Three Experts Reveal Their Predictions!

Mortgage interest rates have been front page news in the real estate market for the past year and have kept many prospective buyers and sellers on the sidelines as rates reached decade highs these past few months. Wondering when relief may be in sight, we're being asked more and more when we think interest rates are going to drop. Today we're going to take a look at where things stand currently and where a few experts have predicted things will go in the coming year. 

First off, lets take a look at where mortgage rates currently stand as we wind down 2023. As you'll see, rates have already begun to trend downward from the highs seen in October when the nationwide average reached 8.45%. Currently as we close in on December the nationwide average is just about a full percentage point lower. But where will rates be heading in 2024? Let's take a look at three expert predictions. 

As you'll notice in the projections above, experts believe that we've peaked in terms of mortgage interest rates for the time being, with some being more bullish on the coming year than others. The National Association of Realtors and the Mortgage Bankers Association both predict that rates will drop into the high-to-mid six's by quarter two of the coming year and even expect rates to get down near the high five's by the end of 2024. For those possibly locked into rates below 4% or for those who are hoping to see rates drop to that threshold again you should proceed with caution. As you'll see below, it could be years if not decades before we see rates drop that low again which in turn could result in years of missed appreciation. 

Above you can see a historical view of where interest rates have been and why it was such a big deal to have them so low a couple of years ago. Generally speaking, rates are projected to continue to normalize in the coming year but how that correlates with the lack of inventory remains to be seen. We'll keep you updated on more local and national real estate news as it comes in, in the meantime if you're thinking about buying or selling in the coming year we recommend staying on top of your local inventory and daily mortgage rates and when it comes time to buy or sell, give us a call! If you found this information useful stay tuned for more of our local market updates and check out some of our other blogs on our website. 

Happy Holiday's from The Mota Team! 

Fernando Mota

(916)494-9543

Fernando@TheMotaTeam.com 

www.TheMotaTeam.com