What Is The Future For Interest Rates?

There has been a lot of talk about what to expect for interest rates in 2024. If 2023 was the year for rate hikes, most experts are hopeful that 2024 will be the year for easing, and eventually rate cuts. While all of this is dependent on many things, including the overall health and recovery of the economy, geopolitical issues, etc., most experts agree 2024 will offer some relief to borrowers.

Before we get into future predictions, let’s recap what happened in 2023…

• The Fed cut the rate 4 times.
• The last Fed rate increase was in July 2023.
• Rates rebounded at the end of year, finishing nearly 1% lower than the peak in October of 2023.

What is in store for 2024?

The first Federal Reserve meeting of 2024 will be at the end of January. Most experts believe the Fed will hold rates at their first meeting, which is probably a good call considering inflation. After that, opinion is split about what they will do at their March meeting – some say they will hold, others say they will make a small cut.

Most experts believe the Fed will definitely cut rates in May, which is consistent with predictions that things will improve from there. Again, there are lots of factors that can still impact market recovery, but historical data supports this thought process.

Where will rates be by the end of 2024?

I’m a builder, not an economist, so I definitely listen to what the talking heads have to say. Most experts in the mortgage industry believe rates will edge down towards 6% by the end of 2024, and then we should see continued improvement into 2025.

Will rates get back to 3-4%?

One thing economists and mortgage experts can agree on is that it is unlikely we will see mortgage rates get back to the record lows we saw just 3 years ago. Most believe the low rates artificially propped up the economy and together with record spending in Washington, we are now dealing with inflation and a sluggish economy. Historically, mortgage rates in the “6’s” have been considered healthy.

We will see what 2024 has in store for rates!

Is 2024 the year you will start your NDI custom home? Contact us for a free consultation at 800-406-8555 or hello@newdimensionsinc.com.

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