The rise in interest rates has greatly impacted the housing market. Unless you need to move, most homeowners are riding out the changes by staying where they are. Since for many, the differences in buying abilities when the rate is at four percent versus seven is great, it makes sense for potential sellers to wait for change. However, this also impacts buyers. With fewer homes on the market, buyers have fewer choices and face competition for homes that they are interested in from other buyers. This has led to a leveling of our Locust Grove housing market in 2023. The biggest question I get from sellers and buyers is, “Will interest rates go down?” While I don’t have a crystal ball that can predict the economic and political future of the world, I can turn to the experts. The top research firms that focus on the housing market and interest rates have some positive news for us all.
What are the predictions about drops in interest rates for mortgages?
These are forecasts based on a thirty year fixed mortgage rate.
The MBA , a Washington, D.C. based trade group, projects that during the fourth quarter of 2023 mortgage interest rates will drop to 5.9%. By the end of 2024, MBA projects that rates will continue to decrease to 4.9%.
Morningstar tracks all things business. The economists there are predicting that mortgage interest rates will drop to 6.25% by the end of 2023. The economists think that by 2024 the rate will average 5% and will drop to 4% by 2025.
The National Association of Realtors® are more conservative with the drops in interest rates. . They project that mortgage rates will drop to 6.4% by the end of 2023 and will decrease to 6% in 2024.
Goldman Sachs forecasts that mortgage interest rates will be at 6.4% at the end of 2023. According to the investment bank, in 2024, rates will drop to an average of 5.9%
Fannie May forecasts a decrease in interest rates too. The outlook for average mortgage rates at the end of 2023 at Fannie May shows a more conservative decrease at 6.6%. Fannie May predicts that by the end of 2024, rates will drop to 5.9%
Morgan Stanley believes that mortgage rates will drop to 6% at the beginning of 2024.
The predictions from Moody’s Analytics has rates averaging 6.5% through the end of 2023. Then, decreasing to 6% in 2024 and falling further to a mortgage interest rate of 5.5% in 2025.
The experts over at Realtor.com predict that the average mortgage rate will be 6.1% at the beginning of 2024.
What do these mortgage interest rates predictions mean for buyers and sellers?
While there is no singular consensus and these economic experts are making very data heavy predictions, it is encouraging to see that all of the companies are predicting that mortgage rates will drop in the near future.
As the mortgage interest rates decrease, buyers will be able to purchase more with their money since less of it will go towards the interest on the loan. This means that buyers will be able to shop for homes in a larger price range. As buyer activity increases, I would predict that the days on the market for houses in Locust Grove will also decrease.
If you are considering selling your house in Locust Grove, now may be a great time to meet with a Realtor® , like me, just to get your questions answered, find out the value of your home, and learn more about the selling process. Your Locust Grove Realtor® can also make some suggestions about changes to your home or any improvements that will help make it more marketable when you are ready to sell.
