Do We Think Interest Rates Will Ever Fall Again?

Dated: November 7 2023

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Hint…they already have!


Thoughtful and careful homebuyers have been waiting most of 2023 for rates to lower, and they have been told over and over again that they will by year’s end. Here we are at the end of October and as we look the end of 2023 in the face, we must reckon with the fact that not only have rates not lowered, as promised, but they’ve gone up. People who were wondering when? are now beginning to wonder - if?


We have said it before (in this blog post, in fact), and we’ll say it again – to quote the ever-omniscient, Mr. Warren Buffett: “Be fearful when others are greedy and greedy when others are fearful.”


We’re here to address this very issue, and to remind you of why Warren Buffet’s quote is a call to action: be eager in times of fear, for that is where there is the most opportunity. At the dinner table, be hungry when others are choosing not to eat: you will get your pick of the feast. So, grab your knife and fork and get hungry - there is plenty to eat.


Rates continue to be high despite inflation decreasing – so what gives? Once we understand the why, perhaps we can understand and better predict the when.


Mortgage rates are closely tied to economic conditions and inflation, and in 2022, the Federal Reserve raised the federal funds rate to combat rising prices, which also affected mortgage rates. While the data hints at keeping rates elevated, the bond market's behavior suggests they may remain high for the rest of the year. Inflation, particularly in the services sector, has proven persistent, and the labor market's wages remain strong. Once inflation closer approaches the Fed's target of 2% annually, there may be a trend towards lower rates in the future.


Most major forecasters expect rates to fall in 2024. Chris Nocetti, Vice President Sr Home Lending Officer at Citi, asserts that depending on the forecast, 30-year mortgage rates could end up somewhere between 6% and 6.7% by the end of 2024, with the following data to support this claim:


Mortgage Bankers Association:

·      Q1 2024: 6.8%

·      Q2 2024: 6.6%

·      Q3 2024: 6.3%

·      Q4 2024: 6.1%


Fannie Mae:


·      Q1 2024: 7.1%

·      Q2 2024: 7.0%

·      Q3 2024: 6.9%

·      Q4 2024: 6.7%


National Association of Realtors:


·      Q1 2024: 6.1%

·      Q2 2024: 6.0%

·      Q3 2024: 6.0%

·      Q4 2024: 6.0%




The answer remains not if rates will fall but when, and – they’ve already started! Future homebuyers eagerly awaiting lower mortgage rates may soon see their wish granted. Yet remember this will come at the cost of avoiding the competition and higher home prices that will inevitably follow.


The advice we offer time and time again is to prioritize the property over the rate (again, date the rate, marry the real estate!), as you can always refinance when rates swing more favorably. You only have one chance to buy the right property.


Quick update: we saw the Feds react positively to the inflation numbers without increasing the rate. Lenders quickly responded by dropping the rates to over the weekend. It’s happening: be ready and get hungry - some of the best homes are out there right now.  

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Kim Cole

Kim Cole Real Estate brings more than 25 years of expertise in local residential sales, marketing, and escrow management to each client relationship. In-depth knowledge, strategic insight, and broad r....

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