January Mortgage Rate Forecast: Steady While Waiting for Spring
This article was first published on NerdWallet.com.
January mortgage rate forecast
Mortgage rates might not change much in January, after going through a tumultuous spell toward the end of 2023.
Forecasters expect mortgage rates to fall in 2024, but the decline won't necessarily start in January. Instead, a significant drop in mortgage rates will probably wait until the Federal Reserve cuts short-term interest rates. Financial markets are guessing that the first Fed rate cut will happen in the spring after inflation has gone down for several months in a row.
Why rates are expected to fall in 2024
Mortgage rates respond to inflation: They tend to go up when the inflation rate is high and tend to go down when the inflation rate is low. And if inflation forecasts turn out to be correct, they spell good news for shoppers and mortgage borrowers. The Mortgage Bankers Association and Fannie Mae (a finance giant that securitizes mortgages)...