Current:Home > NewsMortgage rates unlikely to dip after Fed meeting leaves rates unchanged-Angel Dreamer Wealth Society D1 Reviews & Insights
Mortgage rates unlikely to dip after Fed meeting leaves rates unchanged
View Date:2024-12-23 19:14:10
The Federal Reserve’s announcement of no immediate rate changes and three cuts before the end of the year is unlikely to bring relief to homebuyers.
“The mortgage market already incorporated that,” Lawrence Yun, chief economist at the National Association of Realtors told USA TODAY. “Consumers who may be looking for (rates of) 3%, 4%, I don’t think it’s going to happen, or even 5%. Consumers need to recognize the new normal.”
The average rate on a 30-year fixed mortgage stood at 6.9% on Wednesday afternoon and is unlikely to dip below 6% before the end of the year.
“I don’t expect a ton of relief this year in terms of lower mortgage rates,” Stijn Van Nieuwerburgh, the Earle W. Kazis and Benjamin Schore professor of real estate at Columbia Business School in New York, told USA TODAY.
He said that the longer the Fed keeps overall borrowing rates up, the less likely it will be for 30-year mortgage rates to decline. Although the Fed doesn't directly control mortgage rates, its policies influence the price of borrowing across the economy.
Learn more: Best mortgage lenders
“Given that we already are in a historically expensive market for homebuyers, it certainly doesn’t mean there’s immediate relief forthcoming,” Van Nieuwerburgh said.
The national median home price in the last quarter of 2023 reached $417,700, according to the St. Louis Federal Reserve Bank. After a 20% down payment, homebuyers would need to take out a $334,160 mortgage to finance a home at that price. At 6.9% interest, the monthly payment on that mortgage would hit $2,201 before taxes.
Despite relatively high mortgage rates, there’s still strong competition for small and mid-sized homes, Yun said.
“Multiple offers are still happening on mid-priced homes and below,” he said, “implying there’s not enough supply.”
But some positive signs have emerged for homebuyers.
Yun said the housing supply is slowly picking up in 2024. “Spring buying season or even summer buying season, consumers will have more choices this year compared to last year,” he said, adding that, going forward, even more relief could come in 2025 when “mortgage rates could be closer to 6%.”
veryGood! (2)
Related
- Alexandra Daddario Shares Candid Photo of Her Postpartum Body 6 Days After Giving Birth
- Is Australia catching the US in swimming? It's gold medals vs. total medals
- Georgia website that lets people cancel voter registrations briefly displayed personal data
- 2024 Olympics: Simone Biles Seemingly Throws Shade at MyKayla Skinner's Controversial Comments
- Keke Palmer Says Ryan Murphy “Ripped” Into Her Over Scream Queens Schedule
- DUIs and integrity concerns: What we know about the deputy who killed Sonya Massey
- Georgia election board rolls back some actions after a lawsuit claimed its meeting was illegal
- Delta CEO says airline is facing $500 million in costs from global tech outage
- Amazon launches an online discount storefront to better compete with Shein and Temu
- Body found of SU student reported missing in July; 3 arrested, including mother of deceased’s child
Ranking
- Horoscopes Today, November 10, 2024
- Microsoft’s cloud business powers 10% growth in quarterly profits
- Some Ohio residents can now get $25,000 for injuries in $600 million train derailment settlement
- Minnesota attorney general seeks to restore state ban on people under 21 carrying guns
- Engines on 1.4 million Honda vehicles might fail, so US regulators open an investigation
- Texas’ floating Rio Grande barrier can stay for now, court rules as larger legal battle persists
- Usher is bringing an 'intimate' concert film to theaters: 'A special experience'
- Officer fatally shoots armed man on Indiana college campus after suspect doesn’t respond to commands
Recommendation
-
Conviction and 7-year sentence for Alex Murdaugh’s banker overturned in appeal of juror’s dismissal
-
Boeing names new CEO as it posts a loss of more than $1.4 billion in second quarter
-
2 youth detention center escapees are captured in Maine, Massachusetts
-
Natalie Portman, Serena Williams and More Flip Out in the Crowd at Women's Gymnastics Final
-
Dave Coulier Says He's OK If This Is the End Amid Stage 3 Non-Hodgkin’s Lymphoma Battle
-
Criticism mounts against Venezuela’s Maduro and the electoral council that declared him a victor
-
4 people and 2 dogs die in a house fire near Tampa
-
'Crying for their parents': More than 900 children died at Indian boarding schools, U.S. report finds