What Will Mortgage Rates Do This Year? 

Key takeaways: 

• Mortgage rates are notoriously hard to forecast. 
• Despite that, it’s always a good idea to know what the pros think. 
• This year, the consensus is for rates to make a slow, gradual, slight downshift. 

Get ready for lower mortgage rates? While the one eternal reality of mortgage rates is just how hard it is to forecast them, it’s probably still worth checking in on what those who make their living forecasting the housing market think. And yes, the general consensus is that the days of “higher for longer” rates are slowly coming to an end. 

Most economists and analysts think that 2023 saw the high point for rates in the current business cycle. Last October, the 30-year fixed-rate mortgage peaked at 7.79%, the highest since 2000! Now, as the thinking goes, rates will inevitably drift lower. 

That makes a lot of sense, given some of the factors that influence mortgage rates. The economy is strong, but inflation is under control and most analysts believe the Federal Reserve is done raising rates. Unfortunately, mortgage rates are not cooperating with that scenario. Since the beginning of 2024, they’ve churned higher nearly every week, and as of the end of February sit just below 7% again.  

Still, we’re only a few months into the year. Here’s what real estate experts think will happen in the coming months. 

• The economics team at Realtor.com believes rates will average 6.8% throughout the year, and end 2024 at about 6.5%. 

• Freddie Mac economists are a little more pessimistic, writing in February that “we expect mortgage rates to move sideways, remaining above 6.5% through this quarter and drifting down to about 6% by year end.” 

• Economists with the Mortgage Bankers Association expect rates to average 6.9% in the first quarter, 6.6% in the second, 6.3% in the third, and fall to 6.1% by the end of the year. The MBA’s forecast was updated at the end of February. 

• That’s a bit lower than the 6.3% rate Goldman Sachs Research is projecting for the end of 2024. The firm expects rates to eventually fall to 6% in 2025. 
   
• In December, Lawrence Yun, the chief economist for the National Association of Realtors said he anticipated four rate cuts this year, with rates averaging 6.3% throughout 2024.  

• Economists at Fannie Mae are perhaps the most optimistic of the lot: they expect rates to average 6.5% in Q1, 6.3% in Q2, 6.1% in the third quarter and 5.9% in the fourth.  

Whether you’re considering buying, selling, taking out some equity or just keeping an eye on the housing market, it’s good to know what the pros think — even if you know there’s a big margin of error. With some slight nuance, most experts are cautiously optimistic, and all believe rates will decline slightly, and gradually, over the course of 2024.