In a sustained trend, mortgage rates have continued their decline, reaching 6.61% in the week ending December 28, 2023, according to data released by Freddie Mac.
This marks the ninth consecutive week of decreases, with rates dropping from 6.67% the previous week and a notable decrease from 6.42% a year ago.
This downward trajectory is the first time rates have dipped below 7% since mid-August. The recent decline can be attributed to the growing anticipation of Federal Reserve rate cuts expected to commence in 2024.
Homebuyers and those considering refinancing may find this ongoing trend beneficial as it contributes to a more favorable borrowing environment.
As the Federal Reserve’s actions come into play next year, it will be interesting to observe how these rate cuts continue to influence the mortgage landscape in the coming months.
With economists forecasting a series of rate cuts by the Federal Reserve in the coming year, the outlook for mortgage rates in 2024 is leaning towards a decline.
While the central bank doesn’t directly control the interest rates that borrowers pay on mortgages, its decisions significantly influence them. Mortgage rates closely follow the yield on 10-year US Treasuries, and these yields fluctuate based on various factors such as expectations surrounding the Fed’s actions, any changes in the Fed’s policies, and investors’ reactions to these developments.
In essence, the intricate relationship between the Federal Reserve’s decisions and mortgage rates underscores the importance of monitoring central bank activities for those navigating the real estate market. As we embark on 2024, keeping an eye on these economic indicators will be crucial for homeowners, prospective buyers, and industry professionals alike.