Current:Home > InvestMortgage rates unlikely to dip after Fed meeting leaves rates unchanged-DB Wealth Institute B2 Expert Reviews
Mortgage rates unlikely to dip after Fed meeting leaves rates unchanged
View Date:2024-12-24 07:50:00
The Federal Reserve’s announcement of no immediate rate changes and three cuts before the end of the year is unlikely to bring relief to homebuyers.
“The mortgage market already incorporated that,” Lawrence Yun, chief economist at the National Association of Realtors told USA TODAY. “Consumers who may be looking for (rates of) 3%, 4%, I don’t think it’s going to happen, or even 5%. Consumers need to recognize the new normal.”
The average rate on a 30-year fixed mortgage stood at 6.9% on Wednesday afternoon and is unlikely to dip below 6% before the end of the year.
“I don’t expect a ton of relief this year in terms of lower mortgage rates,” Stijn Van Nieuwerburgh, the Earle W. Kazis and Benjamin Schore professor of real estate at Columbia Business School in New York, told USA TODAY.
He said that the longer the Fed keeps overall borrowing rates up, the less likely it will be for 30-year mortgage rates to decline. Although the Fed doesn't directly control mortgage rates, its policies influence the price of borrowing across the economy.
Learn more: Best mortgage lenders
“Given that we already are in a historically expensive market for homebuyers, it certainly doesn’t mean there’s immediate relief forthcoming,” Van Nieuwerburgh said.
The national median home price in the last quarter of 2023 reached $417,700, according to the St. Louis Federal Reserve Bank. After a 20% down payment, homebuyers would need to take out a $334,160 mortgage to finance a home at that price. At 6.9% interest, the monthly payment on that mortgage would hit $2,201 before taxes.
Despite relatively high mortgage rates, there’s still strong competition for small and mid-sized homes, Yun said.
“Multiple offers are still happening on mid-priced homes and below,” he said, “implying there’s not enough supply.”
But some positive signs have emerged for homebuyers.
Yun said the housing supply is slowly picking up in 2024. “Spring buying season or even summer buying season, consumers will have more choices this year compared to last year,” he said, adding that, going forward, even more relief could come in 2025 when “mortgage rates could be closer to 6%.”
veryGood! (2573)
Related
- Amazon's 'Cross' almost gets James Patterson detective right: Review
- Florida man charged after lassoing 9-foot alligator: 'I was just trying to help'
- Victory! White Sox finally snap 21-game losing streak, longest in AL history
- New England’s largest energy storage facility to be built on former mill site in Maine
- Harriet Tubman posthumously honored as general in Veterans Day ceremony: 'Long overdue'
- Lionel Richie Shares Insight Into Daughter Sofia Richie's Motherhood Journey
- Nelly Furtado Shares Rare Insight Into Life With Her 3 Kids
- A judge has branded Google a monopolist, but AI may bring about quicker change in internet search
- The Surreal Life’s Kim Zolciak Fuels Dating Rumors With Costar Chet Hanks After Kroy Biermann Split
- Marathon swimmer who crossed Lake Michigan in 1998 is trying it again
Ranking
- Will the NBA Cup become a treasured tradition? League hopes so, but it’s too soon to tell
- Olympic Pole Vaulter Anthony Ammirati Offered $250,000 From Adult Website After
- Why is 'Brightwood' going viral now? Here's what's behind the horror sensation
- 'Choose joy': Daughter of woman killed by Texas death row inmate finds peace
- Jared Goff stats: Lions QB throws career-high 5 INTs in SNF win over Texans
- 'Choose joy': Daughter of woman killed by Texas death row inmate finds peace
- Lucille Ball's daughter shares rare photo with brother Desi Arnaz Jr.
- Disney+, ESPN+ and Hulu streaming subscription price hikes coming
Recommendation
-
Michael Grimm, former House member convicted of tax fraud, is paralyzed in fall from horse
-
Striking video game actors say AI threatens their jobs
-
Judge keeps alive Vermont lawsuit that accuses police of force, discrimination against Black teen
-
Devin Booker performance against Brazil latest example of Team USA's offensive depth
-
Elon Musk says 'SNL' is 'so mad' Trump won as he slams Dana Carvey's impression
-
Judge rejects bid by Judicial Watch, Daily Caller to reopen fight over access to Biden Senate papers
-
Ex-Illinois deputy shot Sonya Massey out of fear for his life, sheriff's report says
-
Man who decapitated newlywed wife sentenced to 40 years in Texas prison