Mortgage Rates Have Fallen Below the 7% Threshold

In a positive turn of events, mortgage rates have recently dropped below 7%, marking the first time they’ve been this low since August, according to a recent report by Freddie Mac. This development, occurring during the holiday season, serves as a welcome gift for prospective home buyers who had been deterred by elevated borrowing costs in previous months.

The reduction in mortgage rates is particularly significant, with the rate now standing at 6.95%, offering relief to those in the market. Notably, this drop translates into a more affordable monthly mortgage payment for a $400,000 home, now amounting to $2,118. This represents a substantial decrease of $183 per month compared to the higher rates experienced earlier in the fall, reaching 7.79%, as highlighted by Jessica Lautz, deputy chief economist at the National Association of REALTORS®.

Looking ahead, economists anticipate further declines in mortgage rates as we enter the new year. The Federal Reserve’s decision to maintain its benchmark interest rate and the indication of potential rate cuts in 2024 contribute to a sense of optimism. This development is expected to alleviate pressure on various interest rates, including long-term mortgage rates. The National Association of REALTORS® predicts that mortgage rates will average 6.3% in 2024.

As mortgage rates trend downward, there is a growing sense that the real estate market is poised for stronger sales activity in 2024. Jessica Lautz notes that the direction of momentum is favorable, posing the question of whether the upcoming real estate market will follow a traditional spring pattern or see increased activity during the winter months as rates continue to decline. There is also hope that the lower mortgage interest rates will stimulate greater homebuilder activity, addressing the need for increased inventory as more buyers re-enter the market.

For the week ending December 14, Freddie Mac reports the following national averages in mortgage rates:

30-year fixed-rate mortgages: averaged 6.95%, down from the previous week’s 7.03% average. A year ago, the average was 6.31%.

15-year fixed-rate mortgages: averaged 6.38%, showing an increase from the previous week’s 6.29% average. In comparison, the average rate was 5.54% at the same time last year. This recent development in mortgage rates signals promising prospects for home buyers and hints at a potentially healthier housing market in 2024.

As we look ahead to a more favorable market, now is the ideal time to explore your real estate goals. Whether you’re a first-time homebuyer taking advantage of these historically low mortgage rates or a seller eager to capitalize on increased buyer activity, We are here to guide you every step of the way. Let’s turn these promising trends into a successful real estate journey together. Contact us today to discuss your personalized strategy and make 2024 the year you achieve your homeownership dreams!