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Mortgage Rates Expected to Drop to 5.5% in 2024
Mortgage rates in the U.S. will decline by the end of 2024, according to the latest Bloomberg Markets Live Pulse survey. The rate on a 30-year, fixed mortgage is expected to fall to 5.5% by Dec. 31, according to the median from 236 respondents. That would represent a drop of more than a full percentage point from its current level of about 6.69%, and the first annual decline after three consecutive years of gains.
In 2023, elevated mortgage rates dragged sales of existing homes down to their lowest pace since 1995, reported Bloomberg News. In 2023, only 4.09 million existing homes were sold, according to the National Association of Realtors.
“The worst is over for the housing market, but a full recovery will be slow in coming,” Mark Zandi, chief economist at Moody’s Analytics, told Bloomberg. “Mortgage rates should continue to trend lower this year.”
CNN reported last April that a study from John Burns Research and Consulting found that a 5.5% mortgage rate was a tipping point. “Our consulting team has witnessed this across the country, noting that home builders who choose to subsidize buyers’ mortgage rates, bringing the overall rate down below 5.5%, have been achieving the most success,” CEO John Burns and Maegan Sherlock, a senior research analyst, wrote.
That being said, Zandi posted on X this past weekend that higher home prices will continue to be an issue. For first-time homebuyers, “buying a home is not even remotely possible” due to the collapse in affordability, he posted.
