The housing market can be a labyrinthine journey, and for potential homebuyers, securing a favorable mortgage rate is the key that unlocks the door to homeownership. This week, with economic data on the lighter side, predictions for mortgage rates paint a picture of relative stability, but with undercurrents of potential movement in both directions. Let's delve into what experts are saying about mortgage rates for the next week of July 18-23, 2024.
Mortgage Rate Predictions Next Week
A Forecast of Stability
A Bankrate poll suggests that the majority of experts (53%) anticipate mortgage rates to hold steady. This aligns with the views of several industry leaders, including Michael Becker and Dick Lepre. Becker cites the lack of significant economic reports this week as a reason for rates to remain flat, avoiding the kind of market fluctuations that can occur in response to major economic news.
Similarly, Lepre predicts rates to stay within a narrow range of 6.75% to 6.875% for the 30-year fixed mortgage. This stability provides a window of opportunity for potential homebuyers who are ready to move forward and lock in a competitive rate. Locking in a rate can provide peace of mind, knowing exactly what your monthly mortgage payment will be and avoiding the uncertainty of potential future rate increases.
Hope for Lower Mortgage Rates
Some experts foresee a potential decrease in rates, buoyed by factors like easing inflation and the possibility of a Federal Reserve rate cut later this year. Ken H. Johnson highlights the recent decline in ten-year yields and positive stock market performance, suggesting a continuation of the downward trend for mortgage rates.
Melissa Cohn emphasizes the increasing likelihood of a September Fed rate cut, which could lead to further decreases. Industry leaders like Greg McBride, Joel Naroff, and Denise McManus share this sentiment, expecting rates to dip in the coming week. For potential homebuyers, this forecast is welcome news, as even a small decrease in rates can translate into significant savings over the lifetime of the mortgage.
A Possibility of Upward Movement
A smaller group of experts believe rates might rise. Richard Martin bases his prediction on potentially disappointing housing data, while Sean P. Salter sees the upward trend from last year continuing until a more significant action is taken by the Fed. Robert J. Smith anticipates rates to remain relatively unchanged, staying under 7% for the foreseeable future.
This potential for an increase underscores the importance for homebuyers to stay informed about economic developments. By closely following economic news and housing market trends, potential homebuyers can be better prepared to make informed decisions.
The Bottom Line
Overall, the forecast for the week leans towards stability, with a possibility of rates nudging down or up slightly. This lack of a definitive direction might be due to conflicting economic signals. Inflation appears to be cooling, potentially prompting a Fed rate cut, which could lower mortgage rates. However, other factors like housing market data could influence rates in the opposite direction.
For potential homebuyers, this period of relative stability offers an opportunity to lock in a competitive rate. If you're ready to move forward, shopping around and comparing rates from different lenders is crucial. With the possibility of a Fed rate cut on the horizon, staying informed about economic developments can also be helpful in making informed decisions.
Mortgage Rate Predictions for the Next Month – August 2024
While the forecast for the week of July 18-23, 2024, pointed towards relative stability in mortgage rates, August 2024 promises to be a more interesting chapter. Experts anticipate a continuation of the current trends, with some potential for volatility. Here's a breakdown of what to expect:
A Tilt Towards Decrease in Mortgage Rates
Many experts believe the downward trend in mortgage rates will likely continue in August. Factors like:
- Cooling Inflation: If inflation continues to show signs of receding, as some reports suggest, it could lead the Federal Reserve to cut rates in September. This anticipation is already influencing mortgage rates, pushing them downwards.
- Market Optimism: Positive economic indicators like a strong stock market can also contribute to a decrease in mortgage rates.
Experts like Ken H. Johnson, Melissa Cohn, and Greg McBride foresee a continuation of this decline in August.
The Fed Factor
The Federal Open Market Committee (FOMC) meeting in September is a major event that could significantly impact mortgage rates. If the Fed signals a rate cut, it could trigger a more substantial decrease in mortgage rates throughout August. However, the absence of a rate cut or any hawkish signals from the Fed could lead rates to stagnate or even nudge upwards.
The Wildcard: Economic Data
Economic data releases in August can introduce volatility. Disappointing housing market data or a sudden spike in inflation could cause mortgage rates to rise. Experts like Richard Martin base their predictions on this possibility, highlighting how unexpected economic news can disrupt the downward trend.
Expert Predictions: A Mixed Bag
- The Mortgage Reports predicts rates to stay around the 7% mark for the 30-year fixed rate, with a potential decrease contingent on the FOMC meeting.
- Fannie Mae and the Mortgage Bankers Association (MBA) project a slight decrease in rates, averaging around 6.8% for the 30-year fixed in Q3.
August 2024 could see mortgage rates continue their downward trajectory, potentially reaching the 6.4-6.6% range some experts predict. However, the influence of the Fed and economic data releases make it a month with the potential for fluctuations.
Current Mortgage Interest Rate Trends
Month | Average 30-Year Fixed Rate |
June 2023 | 6.71% |
July 2023 | 6.84% |
August 2023 | 7.07% |
September 2023 | 7.20% |
October 2023 | 7.62% |
November 2023 | 7.44% |
December 2023 | 6.82% |
January 2024 | 6.64% |
February 2024 | 6.78% |
March 2024 | 6.82% |
April 2024 | 6.99% |
May 2024 | 7.06% |
June 2024 | 6.92% |