When MIGHT mortgage rates start to go down?
Ah, the million-dollar question – “When will mortgage rates go down?” If only I had a crystal ball to answer that. (And hey, if you’ve got one, send it my way.) While I can’t predict the future, what I can offer are some insights. Think of it as your toolkit to be ready for action.
1. Economy cues – Listen to the dollar signs.
When the economy hits a rough patch like slower growth or fewer jobs being created, it can prompt the central bank to cut interest rates. This can have a ripple effect on mortgage rates, leading to a drop. When you keep an eye on the economic growth, (EX: GDP growth), this could be a sign for lower rates.
2. Enter the Fed.
The Federal Reserve (AKA: The Fed) plays a huge role in determining rates. If the Fed decides to cut its benchmark rate, it could set up a chain reaction causing the rates to fall.
3. Bonds, not James Bond: Mortgage Bonds.
Mortgage rates are often linked to government bonds. Calling out the 10-year treasury bond yield, to be specific. When this drops, it could indicate that investors are seeking safe investments due to the economy (see point #1.) If the 10-year treasury yield drops, it’s an indication that rates might too.
4. What the experts are telling us.
While they might not have a crystal ball either, they’re detecting that rates will drop in the early to middle of 2024. Although they’re suggesting a rate drop, it might not be as low as you hoped.
What Should You Do Now?
Don’t throw in the towel just yet! You CAN still buy a home right now. Remember, when rates do drop, the demand for homes could spike, leading to potential price increases. This could be your golden opportunity to get the home you need.
In the evolving world of mortgages, it’s all about being prepared. While we’ve given you some valuable insight, predicting rate movements is pretty complex. That’s where our experts can step in. If you are thinking about purchasing within the next year – start preparing now. If you are thinking about purchasing even sooner than that, give us a call or fill out our online application here. When you speak to our experts, they will help prepare you to make sure you have a flawless experience.
Meet Dani, a genuine Michigander with a decade long tenure in the Credit Union and Finance industry. Driven by a passion for empowering consumers, Dani exudes a friendly spirit and is here to simplify mortgage jargon, to ensure you feel confident in your home-buying experience.
« Return to "Financial Resources & Blog"