This page offers mortgage rate trends and predictions for 2024, along with a wealth of resources to help you qualify for the best rate on your home loan.
As a home buyer or mortgage shopper, you need access to the latest information relating to mortgage rates. You want to know (A) where rates are right now, (B) where they might be going in the future, and (C) what steps you can take to get the lowest possible rate on your mortgage loan.
The Home Buying Institute has compiled all of this information in one place.
Mortgage Rates Trends: Early February 2024
During the week ending on February 1, 2024, the average rate for a 30-year fixed mortgage loan was 6.63%. That’s based on the weekly nationwide survey conducted by Freddie Mac.
FYI: Freddie Mac is one of the government-sponsored enterprises (GSEs) that purchase home loans from mortgage lenders, which allows lenders to make more loans to borrowers. Fannie Mae is the other GSE.
Mortgage rates have trended downward over the past three months or so, after peaking at around 7.8% back in October. This trend has enticed more home buyers to enter the housing market, leading to an uptick in home sales and purchase loan activity.
According to the research team at Freddie Mac:
“Although affordability continues to impact homeownership, the combination of a solid economy, strong demographics and lower mortgage rates are setting the stage for a more robust housing market. Mortgage rates have been stable for nearly two months, but with continued deceleration in inflation, rates are expected to decline further.”
The chart below shows the average rate for a 30-year fixed mortgage loan over the past year. You’ll notice how home loan rates rose during the summer and fall of 2022, before declining through the last two months of the year.
You can also see how the mortgage rate tend line leveled off during January of 2024, hovering around the 6.6% range. Many economists believe this represents a new normal for interest rates, and that it will continue throughout the first quarter of 2024.
So let’s take a closer look at those mortgage rate predictions for 2024.
Forecast and Predictions for 2024
The following image offers a mortgage rate forecast for the rest of 2024, focusing on the popular 30-year fixed mortgage. We created this image by averaging the rate predictions offered by multiple economists, research groups and organizations.
Note: We update this page and graphic often, so be sure to check back for updates.
While no one can predict future mortgage trends with complete accuracy, the overall “consensus prediction” is that rates will gradually decline over the coming months and possibly end the year close to 6%.
If this forecast turns out to be true, it would reduce borrowing costs and improve affordability for home buyers later in 2024 — at a time when both of these things are much needed..
Factors That Can Affect Your Mortgage Rate
The trends and predictions summarized above relate to average mortgage rates in the U.S. The actual interest rate you receive when applying for a home loan will depend on a variety of factors, including personal factors like your credit score.
Some borrowers qualify for mortgage rates below the national average, while others get charged a higher rate of interest on their home loans. There are many variables that can influence your borrowing costs, including the following:
Personal Factors
- Credit score: Higher scores generally qualify for lower rates.
- Down payment: Larger down payments reduce risk and often lead to lower rates.
- Debt-to-income ratio (DTI): Lower DTI indicates better financial stability and can improve rates.
- Employment history: Steady employment and income strengthen your borrowing profile.
Market Factors
- Overall interest rates: National economic conditions and Federal Reserve policy influence rates.
- Loan term: Shorter terms (e.g., 15 years) usually have lower rates than longer terms (e.g., 30 years).
- Loan amount: Larger loans may come with slightly higher rates due to increased risk for lenders.
- Location: Mortgage rates can vary slightly depending on regional economic factors.
Lender Factors
- Risk tolerance: Some lenders may be more willing to offer competitive rates to attract borrowers.
- Competition in the market: More competition among lenders can lead to better rates for borrowers.
- Discount points: Some lenders allow borrowers to pay points in exchange for a lower interest rate.
Tips for Securing a Lower Rate
Mortgage rate predictions for 2024 suggest that home buyers could enjoy lower borrowing costs in the months ahead. But there are also some proactive steps you can take to potentially secure a lower rate on your home loan.
- Boost your credit score: This is the single most influential factor. To receive a lender’s best and lowest rates, try to get your score above 750. Pay bills on time and cleaning up errors on your credit report could boost your score.
- Put more money down: A larger down payment reduces your loan-to-value ratio (LTV), making you less risky to lenders. This in turn could lead to a lower mortgage rate. Also, a down payment of 20% or more allows you to avoid private mortgage insurance (PMI).
- Shop and compare lenders: Don’t settle for the first offer you get. Compare rates, terms, and fees from multiple lenders to find the best deal.
- Consider a shorter term: Generally speaking, a 15-year fixed mortgage will offer a lower rate than longer terms like 30 years. But a shorter term also leads to higher monthly payments, by compressing the repayment window, so this strategy is not for everyone.
- Buy down the rate: Consider paying upfront fees to lower your interest rate. This can be expensive on the front end but may save you money over the life of the loan, especially if you plan to stay in the home long-term.
- Consider an ARM: Adjustable-rate mortgages typically offer lower initial rates during the first few years of homeownership. But the rate can adjust (and possibly increase) after that initial phase. So you should only choose an ARM if you understand the long-term uncertainty they can bring.
Resources and Guides for Borrowers
In addition to tracking mortgage rate predictions and tends throughout 2024, HBI offers a wealth of educational resources for home buyers and homeowners. We maintain one of the largest collections of mortgage-related articles, guides and tutorials.
Here are some of our most popular articles relating to mortgage rates:
Difference Between the APR and Mortgage Rate
The annual percentage rate, or APR, includes the full cost of the loan with the interest rate and other fees. This allows you to compare one mortgage offer to another, in a standardized and transparent manner.
How Do Lenders Assign Rates on Home Loans?
Mortgage lender consider a wide range of criteria when determining the interest rate on a home loan. That’s why it can vary from one borrower to the next. They’ll consider everything from the credit score to the size of the down payment, and more.
How to Negotiate the Rate With Your Lender
Some borrowers have more negotiating ability than others, when it comes to mortgage loan pricing and terms. This guide explains how to maximize your negotiating leverage, to secure the best rate possible.
Adjustable Versus Fixed-Rate Mortgage Loans
It’s one of the most important choices you’ll make as a borrower. Do you want a “fixed” mortgage with an interest rate that stays the same, or an adjustable mortgage (ARM) that offers a lower rate during the first few years?
Disclaimer: This page includes mortgage rate predictions for 2024 and other forward-looking projections. They are the equivalent of an educated guess and should be treated as such. The Home Buying Institute (HBI) makes no claims about future real estate or mortgage-related trends.