🤔 Will mortgage rates drop in 2024?

A small drop in interest rates could save homeowners hundreds! ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ [Better] [Better]( This week's mortgage rates [Rate chart] [Rate chart]( Source: US average mortgage rates from [FreddieMac]( --------------------------------------------------------------- Better Mortgage Interested in today's rates? [See Better Mortgage rates]( --------------------------------------------------------------- #FundFact 📈 The mortgage interest rates for a 30-year fixed loan peaked at 8.45% during October 2023!¹ [Rate chart] [Rate chart]( Things to know Mortgages rates have dropped significantly since October 2023 Mortgages rates have dropped significantly since October 2023 If beginning your journey to homeownership is on your list of New Year's Resolutions, you may be in luck. It’s no secret that we experienced historic highs in the US housing market throughout 2023, but hopeful homeowners may be on the brink of achieving their homeownership goals in 2024 if rates ease. The Federal Open Market Committee (FOMC) holds eight regularly scheduled meetings per year where they discuss economic and financial conditions to determine the appropriate stance for our monetary policy. Last month, the FOMC held the last meeting of 2023, where they delivered promising updates for the future of rates in 2024. The [first meeting of 2024]( will take place at the end of this month from January 30-31. What is the federal funds rate and how does it impact mortgage rates? The federal funds rate is the interest rate that banks charge each other to borrow money, and it’s a primary tool used by the Federal Reserve (“the Fed”) to help slow inflation. The FOMC’s decision to change the federal funds rate can indirectly affect the kind of rate you’re offered for a mortgage and therefore, how much you pay for a home. What happened during the most recent FOMC Meeting? Beginning in March 2022, the Fed began to raise the federal funds rate in order to help curb inflation which was at about 8%.² At the final FOMC meeting of 2023, the federal funds rate was held at 5.25% to 5.50%, where it has been since late July 2023.² The hold on the federal funds rate comes after months of it being raised at a historically rapid pace, which indicates that we could be near the end of rate increases for this tightening cycle. This most recent meeting marked the third consecutive meeting in 2023 where the Fed left rates unchanged. What’s in store for current homeowners or potential homebuyers in 2024? While we can’t ever truly predict where mortgage interest rates are headed, the news delivered last month by the Fed to hold the federal funds rate can give current homeowners and potential homebuyers some hope for homeownership savings in 2024. The mortgage interest rate on a 30-year fixed loan hit a peak of 8.45% in October 2023¹ and has come down since with rates wavering around 6% as of January 4, 2023. This change in rates since October 2023 could afford hopeful homeowners substantial savings compared to pricing they may have received last year. Especially since we know that every point counts — half of a point of mortgage interest could represent thousands of dollars over the life of a loan! Since January 2021, there have been 3 million new mortgages originated with interest rates of 6% or higher.³ That means if rates dropped to even 5.5%, homeowners across the country could benefit from significant savings if they refinance into a lower rate. For example, the estimated monthly payment on a $350,000 mortgage at 6% is $2,098 compared to a monthly payment of $1,987 at 5.5%. While a decrease in mortgage rates can help cut down housing costs, there’s no guarantee that we’ll see rates drop dramatically. In fact, housing economists predict that while there might be a drop in rates, it’ll only be a modest amount.⁴ Potential homebuyers that are in a strong financial spot may want to consider their homeownership options now — if rates do drop, home prices will likely increase creating a competitive housing market that may not outweigh the savings of a minor rate drop. --------------------------------------------------------------- Better Mortgage Make strong offers with a One Day Verified Approval⁵ [Get started]( --------------------------------------------------------------- Press play Follow us on social to stay up to date with the latest mortgage tech, tips, and tools: Watch on [TikTok]( • [Instagram]( • [YouTube]( • [Facebook]( --------------------------------------------------------------- Better Mortgage Questions? Connect with a mortgage expert now [Apply today]( --------------------------------------------------------------- Quiz Which items make up your monthly mortgage payment? - Principal, interest & escrow - Principal, interest, taxes & insurance - Principal, interest, taxes & escrow - Principal, interest, taxes & amortization fees [Better] [Better] [social]( [social]( [social]( [social]( ¹ Source: [Investopedia]( ² Source: [NBC News]( ³ Source: [Scotsman Guide]( ⁴ Source: [WSJ]( ⁵ See [One Day Verified Approval terms and conditions]( © 2024 Better Home & Finance Holding Company and/or its affiliates. Better is a family of companies. 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