Summer Forecast: Will Mortgage Rates Drop?

Many anticipated a drop in mortgage rates in 2024, but persistent high inflation has kept them around 7%. The Federal Reserve's reluctance to lower the federal funds rate has influenced these steady rates. Experts suggest that without significant economic changes, substantial rate decreases might not occur until late 2024 or early 2025.

Experts like Brian Shahwan from William Raveis Mortgage and Tai Christensen from Arrive Home share their insights. Shahwan believes rates might soften slightly due to economic data but doesn't expect significant changes this summer. Meanwhile, Christensen predicts minor decreases but sees more substantial drops towards the end of the year as inflation hopefully eases.

Despite some optimism for lower rates, the consensus indicates that more meaningful changes are likely later in the year or beyond. Homebuyers might see slight improvements this summer, but substantial rate reductions are expected to take longer.

The Bottom Line

While there's potential for minor mortgage rate decreases this summer, significant drops are more likely towards the end of 2024 or into 2025, following a more substantial shift in economic conditions. Homebuyers should prepare for a range of scenarios as they navigate the housing market this year.