One of the questions I get asked frequently is when are rates going to start to drop. The last few weeks have been a bit ugly in the mortgage rate world and no one truly knows the answer to that question. I will make the comment that my crystal ball is a bit fuzzy! So this week I saw an article that had several interest rate predictions for the 4th quarter of 2023 and beyond. Now no one truly knows what is going to happen and recent forecasts have missed the mark in many cases so this may not happen either but….Here are some leading research firms thoughts moving forward:
The MBA thinks that the 30 year fixed rate mortgage rate will be around 5.9% in Q4 2023. They also believe that rates will slide to 4.9% by the end of 2024.
Morningstar economists think that the average 30 year fixed rate will be around 6.25% for 2023, closer to 5% for 2024 and 4.0% in 2025.
Goldman Sachs projects that the 30 year mortgage rate will be around 6.4% at the end of 2024. In 2024 they believe that rates will average 5.9%.
The National Association of Realtors economists forecast the 30 year mortgage rate to slide to 6.4% by the end of 2023 and then to 6.0% in 2024.
Realtor.com economists think that rates will start 2024 at 6.1%.
Fannie Mae economists forecast the 30 year fixed rate to average 6.6% in Q4 2023 and then drop to an average of 5.9% in Q4 2024.
So when you ask me where I think rates are going to go, you can understand why I say I have no idea! Even the economists that study this every day are all over the map with thoughts on interest rates moving forward. The reality is that they should start to drop towards the end of this year but no one expects home prices to drop. From the calculations I have done for many buyers, they are better off buying now when before home prices continue to drop and then refinancing when rates do drop. We all expect rates to drop at some point but no one knows when that will really happen!