Jala News – Mortgage rates have been steadily decreasing, providing homeowners and potential buyers with a silver lining amidst rising house prices. According to Freddie Mac, current rates have dropped by 0.55% compared to the end of November. Experts believe that this downward trend may continue if inflation eases.
The Mortgage Bankers Association has forecasted that mortgage rates could fall to 6.1% by the end of 2024 and 5.5% by the end of 2025. This is great news for borrowers as it significantly improves affordability. The Federal Reserve’s plan to lower the federal funds rate in 2024 has already led to a sharp decline in mortgage rates, and some experts even believe that rates could decrease further in the future.
For homeowners looking to leverage the value of their homes, a home equity line of credit (HELOC) may be a viable option until mortgage rates ease. Compared to other loan options, HELOC rates are currently relatively low.
Despite the positive news about mortgage rates, house prices are not expected to decrease this year or next. Forecasts predict increases of 6.7% in 2023 and 2.8% in 2024. High mortgage rates have slowed down homebuying demand and put downward pressure on prices, but the current low supply of homes is likely to prevent significant drops.
Historically, house prices tend to drop during a recession due to lower demand. However, this is not guaranteed and with the current market conditions, it is unlikely to happen anytime soon.
To determine how much house one can afford, experts recommend using a mortgage calculator. Housing expenses should generally not exceed 28% of gross monthly income. Additionally, it is crucial for buyers to shop around and get preapproved with multiple mortgage lenders to secure the best rate while ensuring that borrowing stays within their budget.
Overall, the decreasing mortgage rates offer a glimmer of hope for homeowners and potential buyers, making housing more affordable. As the market continues to evolve, staying informed and making well-informed decisions will be vital in navigating the mortgage landscape.
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