Freddie Mac: Rates to Stay Elevated Through 2024
According to Freddie Mac’s July Economic, Housing, and Mortgage Market Outlook, mortgage rates are expected to remain relatively high for most of 2024. The central bank may approve a rate cut later in the year, but rates are projected to stay above 6.5% until the end of 2024, with potential dips in 2025.
Fannie Mae: Slight Decline Expected in Late 2024
Fannie Mae forecasts a modest decrease toward the end of 2024:
- Q3 2024: 6.8% average 30-year fixed mortgage rate.
- Q4 2024: Slight decrease to 6.7%.
The downward trend may continue into early 2025, potentially reaching 6.5% in Q1 2025, creating a marginally more favorable rate environment for Long Island homebuyers.
National Association of Realtors (NAR): Rates Averaging 6.9% in Q3
NAR predicts the 30-year fixed mortgage rate will average 6.9% in Q3 2024, decreasing slightly to 6.5–6.7% by year-end. Lawrence Yun, NAR’s chief economist, notes that buyers can anticipate moderately lower mortgage rates, increased home sales, and more stable home prices in the latter half of 2024.
Mortgage Bankers Association (MBA): Gradual Decline in Rates
The MBA projects:
- Q3 2024: 6.8% average.
- Q4 2024: 6.6% average.
Rates may continue decreasing into 2025, possibly lowering to 6.4% by Q1, providing a more favorable environment for buyers.
Palisades Group: Rates to Stay Above 6.25%
Jack Macdowell, CIO at Palisades Group, predicts rates will stay above 6.25% through 2024, with at most one or two small Fed rate cuts.
RE/MAX: Rates to Decrease to 6.6% by Early 2025
RE/MAX co-founder Dave Liniger expects rates to remain elevated through much of 2024, potentially dropping to around 6.6% by the end of Q1 2025 once the Federal Reserve begins cutting rates.
HSH.com: Rates Between 6.6% and 6.9% Through September
Keith Gumbinger, VP at HSH.com, anticipates mortgage rates averaging 6.6–6.9% through September 2024, noting that recent declines may reflect market expectations for Fed rate cuts.
loanDepot: Rates Could Drop to Mid-6% Range
Jeff DerGurahian, chief economist at loanDepot, believes that if the Federal Reserve begins cutting rates in September, the 30-year fixed mortgage rate could fall from around 7% to the mid-6% range by year-end.
Federal Reserve’s Stance: What It Means for Mortgage Rates in 2024
In July 2024, the Federal Open Market Committee (FOMC) kept the federal funds rate steady at 5.25–5.5%. While a rate cut is possible later in the year, mortgage rates remain elevated due to the Fed’s inflation-control measures.
Impact of Potential Rate Cuts on Mortgage Rates
Even if the Fed cuts rates in September, the mortgage market may already have priced in expectations. Bright MLS predicts rates could decline to around 6.4% by Q4 2024. Home prices are expected to remain high, but increased inventory may provide more moderately priced options.
Is 2024 a Good Time to Refinance?
Refinancing depends on your current mortgage rate and potential Fed cuts:
- Homeowners with rates above 7% could benefit if rates drop into the mid-6% range.
- Those with low-rate mortgages from 2020–2021 may find refinancing less attractive.
Refinancing volume may increase if rates decline later in 2024.
Current Mortgage Rate Trends on Long Island
Long Island’s Nassau and Suffolk Counties remain competitive despite elevated rates. Potential rate drops could spur more refinancing and home purchases. Staying informed and exploring options like assumable mortgages or lender comparisons could yield savings.
Looking Ahead: Mortgage Rates and Long Island’s Real Estate Market
Mortgage rates in 2024 are expected to slowly decline, likely remaining in the mid-6% range by year-end. While rates may not return to pandemic lows, opportunities exist for favorable financing or refinancing. Long Island buyers should work closely with real estate professionals and lenders to navigate the market effectively.
Thinking about selling your Long Island home? Request a free home valuation from Elite Realty Advisers, a licensed real estate brokerage in Farmingdale. I am a real estate broker, not an attorney, and this is not legal advice.