Mortgage rates are likely to remain elevated for the next few months after the Federal Reserve put a hold on interest rate cuts last week.
As of Thursday, the rate for the 30-year fixed mortgage was 7.09%, down 0.13% from last week. The rate for the 15-year mortgage term also fell to 6.38%, declining 0.09% from the previous week, according to figures from Freddie Mac's Primary Mortgage Market Survey. In comparison, mortgage rates were around the 3% range before the Fed hiked interest rates in 2022 to combat inflation.
Despite a recent decline, mortgage rates are expected to remain elevated. That is according to a forecast by Eric Orenstein, senior director of nonbank institutions at research frim Fitch Ratings.
"It does seem like mortgage rates are going to stay where they are for the foreseeable future," he told USA Today.
What Do Other Experts Predict Will Happen to Mortgage Rates This Year?
There have been a number of experts who forecasted the movements of mortgage rates in 2024. Most analysts believe rates will remain elevated and hover between 6.5% and the low 7% throughout the rest of the year.
Fannie Mae, a government-backed organization, in March forecasted that mortgage rates would stay above 6% through 2024 until the fourth quarter of 2025. Specifically, it forecasted that mortgage rates would fall to 6.6% by the end of the year and 6.2% next year.
"Financial markets are now pricing in lower odds of aggressive fed funds rate cuts this year, leading to some upward drift in the mid-to-longer range of the interest rate curve, including mortgage rates,"
In April, the Mortgage Bankers Association (MBA) predicted mortgage rates to fall to 6.4% at year end.
The National Association of Realtors expected rates to hover around 7.1% during the spring buying season before settling at 6.5% by the end of 2024.
The recent forecast on mortgage rates came after the Fed signaled it is holding off on interest rate cuts as inflation picks up again. Additionally, some economists also said the Fed may only do one cut or none by the end of the year.
