What is the mortgage interest rate forecast for October 2024?

It hasn’t been easy for homebuyers in recent years. Mortgage rates have steadily climbed from record lows during the pandemic, and home prices have also jumped. Add to that high inflation and the last two years have been difficult for potential home buyers in America.

Fortunately, the situation is starting to change. Mortgage interest rates have fallen in recent weeks, and the Federal Reserve’s rate cut in September could help improve the situation further as the fall approaches.

Are you considering buying a home or refinancing in the near future? Here’s what you can expect mortgage interest rates This autumnaccording to professionals.

Learn more about the highest mortgage rates you can count on here.

What is the mortgage interest rate forecast for October 2024?

Mortgage rates tend to move in anticipation of potential Fed moves, and with Fed Chairman Jerome Powell all but guaranteeing a rate cut in his economic speech last month, mortgage rates have fallen significantly in the past few weeks. The average rate on a 30-year mortgage has fallen from 6.72% in early August to the average is 6.15% Today.

“The market has already priced that in,” says Kevin Leibowitz, a mortgage broker at Grayton Mortgage. “That’s why we’re seeing lower rates.”

The Fed also opted to cut rates by 50 basis points instead of the expected 25 basis points at its September meeting, which was at least partially factored into rates ahead of the cut. But the larger-than-expected cut could have a further impact on rates — as could future Fed rate cuts, which are still widely expected for the rest of 2024 and into 2025.

The Federal Reserve’s comments could also “set the market in motion,” Leibowitz says.

“The key is the Fed’s comments on future cuts,” says Debra Shultz, vice president of lending at The Shultz Group at CrossCountry Mortgage. “The market always runs ahead of the Fed, which means analysts are guessing where rates are headed, and markets are adjusting accordingly.”

However, most experts expect that the feet will fall lower this fall.

“The Fed has stopped saying, ‘We’re waiting for more data,’ and is now focused on when and how quickly to cut rates,” Shultz says. “I’m looking at high rates, 5% in the next two to three weeks — at most.”

Currently, the Mortgage Bankers Association is forecasting an average mortgage rate of 6.5% through the end of the year (though that forecast comes from the group’s Aug. 15 forecast). Fannie Mae is forecasting an average rate of 6.4%.

“We should see further improvement in interest rates over the next month or two, and as we get closer to the election,” says Darren Tooley, a loan officer and sales manager at Union Home Mortgage. “It’s hard to say exactly how much they’ll improve over that time, because a lot of the information that will determine that is still to come in, but I think an improvement of more than 0.25% in interest rates over the next few months is within reason.”

Again, larger-than-expected rate cuts or comments indicating more rate cuts are imminent could be factors that could push the situation forward. Mortgage interest rates even lower.

“If the Fed decides to cut rates by 0.50%, that could accelerate the process — causing mortgage rates to fall even further and faster than currently anticipated,” Tooley says.

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Summary

At the end of the day, these are just predictions, and there is no guarantee that mortgage rates will move one way or the other this fall. While lower rates are likely, moves by the Fed, inflation, and unemployment could all screw things up and change the direction of interest rates.

“Consumers shouldn’t bet one way or the other,” Shultz says. “If the market fell too quickly based on what the Fed is saying, the rate cut could be viewed as disappointing and rates could actually go up. If the Fed cuts rates a little less than expected, but the wording is, ‘We expect more frequent and larger cuts in the future,’ then you could see a smaller cut that would cause rates to fall. The market would decide where rates go.”

You also need to think about the choices.

“Aside from the Fed’s rate cuts, two other factors that are having a big impact on mortgage rates right now are jobs and inflation. These economic measures, along with the election cycle and future plans by candidates to boost the economy, will determine the path of mortgage rates this fall,” Tooley says.