By Akash Akash
August Predictions: Potential Drops in Mortgage Interest Rates
With mortgage rates significantly higher than the lows of 2020 and 2021, potential homebuyers are keenly observing market trends for any signs of decrease. Here's a look at three possible scenarios in August 2024 that could see mortgage rates fall, providing a much-needed break for buyers in today's expensive housing market.
Possible Decrease in Mortgage Rates This August
Potential Factors Influencing a Drop in Rates
Homebuyers who missed the low rates of the pandemic era continue to face high mortgage costs. However, signs indicate potential rate reductions as early as August. Understanding these possibilities is crucial for buyers navigating today's challenging rate environment.
Federal Reserve's Influence
Although the Federal Reserve's meeting on July 31 is unlikely to directly cut rates, any indications of future rate reductions could prompt lenders to lower their mortgage offers. Buyers should be ready to lock in rates shortly after this meeting, as even small adjustments can lead to significant savings over a 30-year mortgage.
Impact of the Next Inflation Report
Scheduled for August 14, the upcoming inflation report could be a decisive factor. Recent trends have shown a decrease in inflation, which typically leads to lower mortgage rates. If this trend continues, rates could start to decline the following day, impacting borrowing costs positively.
Lenders Anticipating Rate Cuts
Even without an official rate cut from the Federal Reserve, positive economic signs could lead lenders to lower mortgage rates in anticipation of future reductions. This proactive adjustment could make August a pivotal month for potential homebuyers.
Preparing for Potential Opportunities
As August may signal the beginning of declining mortgage rates, prospective buyers should prepare by comparing lenders, improving credit scores, and understanding various mortgage options like adjustable-rate mortgages and mortgage points. This preparation ensures readiness to capitalize on lower rates when they occur.
The Bottom Line
While a formal rate cut might be more likely in September, August could provide early signs of declining mortgage rates. Prospective buyers should stay informed and ready to act, as the market might offer favorable conditions sooner than expected.
Share this article
Start Your Journey
Whether your are buying a new home, or refinancing your current home loan, let the experts at Review My Mortgage guide you on your homeownership journey.
Are you a mortgage professional?
Learn about our unique sponsorships, including RMM PROLender, that can take your production to the next level.
Get in Touch