It's undeniable that mortgage rates have significantly influenced housing affordability in recent years. However, there's a silver lining in sight. Rates have begun to decline, and in fact, they've recently touched the lowest level seen in 2024, as reported by Freddie Mac (refer to the graph below):

If you're contemplating becoming a homeowner, you might be wondering: just how much further can these rates drop? Let's explore some information that can give you a clearer picture.

Predictions on Mortgage Rates

The overarching trend of falling rates is set to persist, provided inflation and the economy maintain their cooling pace. But as fresh data on these crucial factors emerge, expect some fluctuations.

Remember, it's important not to get sidetracked by these temporary hiccups but to keep your eye on the broader trend. Rates have dropped approximately a full percentage point from their peak in May.

The widespread expectation is that rates could possibly reach the low 6s in the months to come, depending on the state of the economy and the Federal Reserve's future actions.

A growing number of experts have started to recalibrate their 2024 mortgage rate predictions, with a more positive outlook that rates will continue to fall. For instance, Realtor.com states:

"Mortgage rates have been revised slightly lower as signals from the economy suggest that it will be appropriate for the Fed to begin to cut its Federal Funds rate in 2024. Our yearly mortgage rate average forecast is down to 6.7%, and we revised our year-end forecast to 6.3% from 6.5%."

Understanding Your Mortgage Rate

So, how does this affect you and your relocation plans? If you've been patiently waiting for rates to decrease, you'll be pleased to know that it's already taking place. You just need to determine, based on expert opinions and your own budget, when you're ready to take the leap. Sam Khater, Chief Economist at Freddie Mac, articulates it well:

“The decline in mortgage rates does increase prospective homebuyers’ purchasing power and should begin to pique their interest in making a move.”

The next step is to ask yourself: what rate would I like to see before I am ready to move?

Is it 6.25%? Or 6.0%? Perhaps even 5.99%? The exact percentage that triggers your readiness to resume your search is a personal decision. Once you've established this, you don't need to track rates yourself and wait for it to materialize.

Instead, establish a connection with a local real estate professional. They'll keep you informed about the current situation and discuss when to make your move. And when rates reach your target, they'll be the first to notify you.

To sum up, if you've paused your moving plans due to rising mortgage rates, consider the rate that would motivate you to dive back into the market.

Once you've figured that out, team up with a real estate professional who can keep you posted and help you seize the opportunity when it arrives.