April 4, 2024
In the end-of-year predictions leading up to 2024, there was talk about a housing market recovery. And there was further talk that such a recovery might happen in Spring 2024.
Now, some have revised their predictions. Those revisions are based in part on the housing market recovery’s progress to date. But there is also discussion about what the Fed might do about interest rates in the Spring and Summer of 2024.
Will Mortgage Rates Change In Spring 2024?
Many anticipate the Fed cutting interest rates in late spring or early summer. But those cuts are not directly applied to mortgage rates. So, what is the Fed talking about doing here?
The act of adjusting the rate for lenders who loan money to the public. Lower rates for the lender can be passed on to the borrower in the form of lower mortgage rates. Will the Fed make conditions favorable for that in late spring?
The Fed’s Wait-And-See Policy On Rates
Multiple sources have written about the Fed’s “wait-and-see” policy toward cutting rates. CBS News reports some mortgage lenders saying, that despite recent statements about possible rate adjustments, “expecting a substantial drop in mortgage rates in the short term might be overly optimistic.”
CBS News says some lenders are not convinced there will be a mortgage rate drop until the Fed’s scheduled meeting in June 2024.
The Federal Reserve may choose to lower rates, but they may only be lowered by a small amount. Or the Fed might decide to leave things alone for now.
No matter what they decide, any change in rates may take time before the numbers can catch up, maintain, and show signs of a real recovery. The real value of rate changes comes when they are a trend and not a flash-in-the-pan investor reaction to new Fed news.
Waiting For Mortgage Rates To Drop?
You may read conflicting things about buying a home in 2024 and the overall state of the housing market. Some buyers hear housing inventory is lower, while others read about more homes for sale being available than expected in their area.
There is no need to rush into the house-hunting phase of your home loan journey. If you are not quite ready, waiting is not necessarily a liability. Still, the conditions in your local housing market rather than nationwide breaking news may be the key information you need, at least for the short term.
The Condition Of Your Local Housing Market
If there are plenty of houses for sale in your market, and you feel ready to start looking, it may be smart to do so.
Waiting for mortgage rates to drop may not serve a house hunter well, depending on circumstances, especially if the borrower needs a house now.
Homebuyers who can wait may be rewarded for their patience with respect to lowering rates, but it is not guaranteed that delaying in hopes of seeing rates fall will work to your expectations. Waiting doesn’t necessarily equal savings, depending on how the housing market recovery goes from here at press time.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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