When will the Fed lower interest rates?

As we move into spring selling season, homebuyers across America are asking when the Federal Reserve will start some mortgage rate cuts. Currently the average 30-year fixed mortgage interest rate is around 6.67%, which is higher than people want, but still better than the 8% peak seen in the last quarter of 2023.

So, will the Fed do some interest rate cuts in 2024?

Right now, as of March 2024, Fed officials say that interest rate cuts are in store this year. However, they are first watching the U.S. economy for signs that will make it favorable to do so. When the cuts do happen, expert economists predict that the percentage can fall between 5.9-6.1%.

At the end of 2023, Fed officials predicted 3 rate cuts in 2024, which are dependent on a variety of factors like economic growth, the labor market, the stock market, inflation rates, and other factors that can soften rates or cause rate hikes.

Long story short: we will have to keep watching and waiting. Keeping track of the most up-to-date inflation data, the U.S. treasury, what Fed policymakers and analysts are saying will all help homebuyers stay on top of potential fed rate cuts.

Following news sources like Bloomberg, CNBC, Forbes, and speaking with your trusted financial advisor will also help you stay informed about possible percentage point cuts.

mortgage interest rates

Will interest rates fall back to 3% anytime soon?

Across the board, most analysts agree that mortgage interest rates are not likely to go down to 3% in the immediate future. When you compare today’s rates with historic American mortgage interest rate data, 3% is actually unusually low. However, we’re not saying that 3% is not possible either, but it’s just highly unlikely in 2024.

mortgage interest rates in 2024

Should I buy a house right now?

It’s no secret that consumer prices for nearly everything is up compared to pre-pandemic days. This is understandably a concern for homebuyers who are wondering if it’s a good idea to buy a house now or wait.

Homebuyers have a few options at hand this year, and the best choice will depend on the individual buyer’s financial profile and life situation.

Got equity? Use it!

For example, homebuyers with a lot of equity in an existing home can pay down mortgage interest rate points with a rate buydown to make their new mortgage payments more manageable.

Hot Tip: New construction homes typically come with some lucrative builder incentives that include rate buydowns, discounts, and free upgrades.

Buy now, refinance later!

Another proposition floating around the internet is that if buyers are capable of handling the current rates, they can buy a house now and refinance later. The intention is to help the buyer avoid the “flood gates opening” when interest rates go down to a level, let’s say 5%, in which many people waiting on the sidelines would jump into the housing market.

However, buyers should pursue this path if they can pay down their house enough to enable refinancing within the first few years, so they can strike when the iron is hot! Nothing’s worse than seeing the rates go down significantly but not having enough equity stored to give your lender the green light to lower your monthly payment!

will interest rates go down 2024

Look for homes with greater confidence with Marketplace Homes

If you need to find a home in 2024, we have the real estate experts who can help you make that big move. As you can see, the world goes on regardless what rates are circulating right now. We have real estate agents who can assist you with finding a new construction home with possible rate buydowns. We can also stay in touch and give you advice on preparing yourself for homeownership!

Whatever your real estate needs are, we are glad to assist you. Contact us today if you have any questions about buying a home in today’s market.

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