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Current Mortgage Rate Updates


As of today mortgage rates have hit a 4 month low of 7.08% (source: https://www.mortgagenewsdaily.com) almost a whole percent lower than October 18, when they hit a high of 8.00%. This is fantastic news for a lot of buyers especially first time home buyers who are waiting on the sidelines for rates to cool down. Remember that with each 1% drop in rates the buyer gains an average of 10% in buying power. This means the buyer has a choice to either up their price range or be able to have a much more affordable down payment when purchasing. Below are a few factors that could contribute to mortgage rates during 2024.

  1. Federal Reserve Policies: The Federal Reserve's decisions on interest rates have a direct impact on mortgage rates. If the Fed adopts a more accommodative monetary policy, it could potentially lead to lower mortgage rates.

  2. Economic Conditions: The overall health of the U.S. economy, including factors like GDP growth, employment rates, and consumer spending, can influence the direction of mortgage rates. Economic strength might lead to higher rates, while economic uncertainty could contribute to lower rates.

  3. Inflation Rates: Mortgage rates are sensitive to inflation. If inflation rises, the Federal Reserve might respond by increasing interest rates, which could push mortgage rates higher.

  4. Global Economic Factors: Events and trends in the global economy, such as geopolitical tensions or economic slowdowns in major economies, can impact investor sentiment and influence interest rates.

  5. Housing Market Trends: The supply and demand dynamics in the housing market, along with home price trends, can affect mortgage rates. High demand and low inventory may put upward pressure on rates.

  6. Government Policies: Changes in government policies related to housing and finance can also impact mortgage rates. For example, new regulations or government incentives may influence borrowing costs.

Although rates are speculated by some economists to drop throughout 2024, there is no magic crystal ball (to my knowledge) that can time future rate drops and hikes. If you as a buyer are financially ready to become a homeowner it is advised to "marry the home, date the rate" meaning that once you lock in a rate on purchasing a home that rate cannot go up. Yet if rates drop after you have purchased you will be able to refinance at the new better rate. If the buyer continues to wait on the sidelines for rates to drop but they continue to get higher, the buyer has just lost buying power.


To get the most accurate and up-to-date information on mortgage rate trends, it's advisable to consult financial experts, economists, and industry reports closer to the time you are considering making a decision. Additionally, monitoring announcements from the Federal Reserve and staying informed about economic indicators will help you understand the broader economic context affecting mortgage rates. Keep in mind that mortgage rates are influenced by a complex set of factors and predicting their future movements with certainty is inherently uncertain.


If you would like to speak further about how to obtain approval for a mortgage going into the new year, reach out to an Ehlinger Team member and they will gladly have you set up in no time for 2024.


William Bernd

(805)236-8381

williambernd@kw.com

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