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Here’s the home equity interest rate forecast for September 2024
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Thinking about tapping into your home’s equity? Recent economic shifts could spell good news for home equity borrowers. With inflation cooling and the Federal Reserve hinting at rate cuts, home equity line of credit (HELOC) and home equity loan rates might become more attractive.
We asked top lending and real estate experts to weigh in on where home equity rates are headed this fall. While most see a downward trend, it’s not a guarantee. Let’s explore where these rates could go in September and what that could mean for you.
Ready to tap into your home’s equity? Find out what rates you could qualify for here.
Here’s the home equity interest rate forecast for September 2024
Home equity interest rates tend to follow the Fed’s moves linearly. “If the Fed cuts rates by a quarter point, you’ll likely see HELOC rates drop by a quarter point as well,” says Jerimiah Taylor, chief real estate officer at Movoto.
Federal Chairman Jerome Powell’s recently indicated policy shift and declining bond rates are driving this anticipated downward trend in home equity loan rates.
Tim Rasmussen, CEO of Community First Federal Credit Union, agrees with this outlook.
“I see a 25-basis point cut in September [and] possibly another full point by December,” Rasmussen says. He cites the downward pressure on the 10-year bond rate as a key indicator.
Though the consensus leans toward a drop, markets can be surprising. Let’s look at three possible scenarios for home equity loan rates this month and how they could affect your financial decisions.
Learn more about the best home equity borrowing options available to you here.
Home equity loan interest rates will drop
A few factors point to a decrease in home equity interest rates this month.
First, Powell recently suggested probable rate cuts at the next Fed meeting in mid-September. If the Federal Reserve decides to lower rates, “it’s a good indicator that they feel the economy is slowing and steering away from a recession, which in turn can result in lower rates for consumers,” says Ward Morrison, president and CEO of Motto Mortgage.
Consumer sentiment is another consideration. Morrison points out that confidence in economic stability and a widespread belief in declining rates can influence the yields for the 2-year and 10-year treasury. This could push rates in a favorable direction. However, he tempers expectations.
“I don’t expect that drop to exceed 25 to 50 basis points,” Morrison says.
But while home equity rates could be heading south this month, don’t expect a free fall. You might not see immediate changes in your borrowing options because, according to Rasmussen, “the drop will be slow at first. Financial institutions are slow to respond to falling rates.”
What this means for you: Lower rates typically mean you’d pay less interest over the life of a new home equity or HELOC loan. This could make larger home improvement projects or debt consolidation more manageable.
Home equity loan interest rates will stay the same
Another possibility? Home equity loan rates remain stable this September.
Morrison outlines what this scenario would require: “Everything happening in the market [would have to be] aligned with predictions set by other prognosticators.”
These predictions, he explains, involve factors such as employment rates, job openings and losses, layoffs and overall economic stability.
What this means for you: Stable rates give you time to compare offers without feeling rushed. But if you’re waiting for a drop, you might need to reassess your plans. Determine whether current rates still allow you to meet your financial goals.
Home equity loan interest rates will increase
“In the off chance that [home equity loan] rates go up in September, [it would likely be] due to information in [upcoming] economic reports,” says Morrison.
Signs of a recession or unexpected unemployment spikes could trigger higher risk premiums on home equity lines of credit.
What this means for you: If rates increase, borrowing against your home equity may become more expensive. “A rising rate could slow borrowing. The economy is struggling, and most borrowers are near limits at current rates,” says Rasmussen. This might hinder your plans for home improvements or debt consolidation. If you’re considering a HELOC, you might want to act sooner rather than later if you believe rates will rise.
The bottom line
Rates on home equity loans may go down in September, but no one is certain. “Regardless of rate fluctuations, using your home’s equity is an effective way to improve your home and increase its value … or take control of your financial situation,” Morrison says.
Speak with a handful of lenders to understand your options if you’ve been thinking about a home equity loan or HELOC. They’ll help you compare loan terms, assess your home’s equity and find out if tapping into it matches your financial goals.
TRENTON, N.J. — Democratic Newark City Council President LaMonica McIver has defeated Republican small businessman Carmen Bucco in a contest in New Jersey’s 10th Congressional District that opened up because of the death of Rep. Donald Payne Jr. in April.
McIver will serve out the remainder of Payne’s term, which ends in January. She and Bucco will face a rematch on the November ballot for the full term.
McIver said in a statement Wednesday that she stands on the “shoulders of giants,” naming Payne as chief among them.
She cast ahead to the November election, saying the right to make reproductive health choices was on the ballot as well as whether the economy should benefit the wealthy or “hard working Americans.”
“I will fight because the purpose of politics and the purpose of our vote is to give the people of our communities and our nation a bold voice,” she said.
Bucco congratulated McIver on the victory in a statement but said he’s looking forward to the rematch in November.
“I am not going anywhere,” he said in an email. “We still have a second chance to make district 10 great again!”
Who are LaMonica McIver and Carmen Bucco?
McIver emerged as the Democratic candidate in a crowded field in the July special election. A member of the city council of New Jersey’s biggest city since 2018, she also worked for Montclair Public Schools as a personnel director and plans to focus on affordability, infrastructure, abortion rights and “protecting our democracy,” she told The Associated Press earlier this summer.
Bucco describes himself on his campaign website as a small-business owner influenced by his upbringing in the foster system. He lists support for law enforcement and ending corruption as top issues.
The 10th District lies in a heavily Democratic and majority-Black region of northern New Jersey. Republicans are outnumbered by more than 6 to 1.
It’s been a volatile year for Democrats in New Jersey, where the party dominates state government and the congressional delegation.
Among the developments were the conviction on federal bribery charges of U.S. Sen. Bob Menendez, who has denied the charges, and the demise of the so-called county party line — a system in which local political leaders give their preferred candidates favorable position on the primary ballot.
Democratic Rep. Andy Kim, who’s running for Menendez’s seat, and other Democrats brought a federal lawsuit challenging the practice as part of his campaign to oust Menendez, who has resigned since his conviction.
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Sean “Diddy” Combs at same Brooklyn detention center that held R. Kelly, Sam Bankman-Fried, other high-profile inmates
A second judge refused to grant bail to Sean “Diddy” Combs on Wednesday and he could remain in federal custody at a Brooklyn detention center until his trial for sex trafficking charges. Combs joins other high-profile inmates, such as singer R. Kelly, fallen cryptocurrency mogul Sam Bankman-Fried, rapper Ja Rule —even Al Sharpton served a brief stint— who were held at the same federal detention center.
Notorious for its horrible conditions —inmates won a $10 million class action settlement after enduring frigid conditions during an 8-day blackout in 2019— the waterfront industrial complex, MDC Brooklyn, houses 1,200 inmates.
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Violence and corruption have long plagued the facility; U.S. District Judge Gary R. Brown of the Eastern District of New York wrote the detention center had “dangerous, barbaric conditions” in a recent sentencing opinion. Two inmates were stabbed to death in recent months and several correction officers have been convicted for smuggling contraband and accepting bribes.
Combs joins a list of high-profile personalities that have landed at the MDC Brooklyn, partly because the city’s other federal detention center, MDC New York, closed in 2021, also due to horrible conditions. The disgraced financier Jeffrey Epstein died by suicide in his cell there in 2019. “Numerous and serious” instances of misconduct among corrections staff gave Epstein the opportunity to kill himself, a subsequent federal watchdog investigation found.
Kelly sued the federal detention center in 2022 for wrongly putting him on suicide watch after his sentencing. Kelly sought $100 million because he said the detention center knew he wasn’t suicidal after he was convicted in 2021 for racketeering and violating the Mann Act, which bars transporting people across state lines for prostitution.
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Former crypto billionaire Bankman-Fried survived on bread, water and sometimes peanut butter when he was in the MDC Brooklyn, his attorney said, because the detention center continued to serve him a “flesh diet” despite requests for vegan dishes.
Ja Rule stayed at the MDC Brooklyn for a brief time before being released after serving most of his two-year sentence for illegal gun possession. Most of his prison time was spent in a state prison in New York.
Sharpton served a 90-day sentence in 2001 and went on a hunger strike for protesting the U.S. Navy bombing of the island of Vieques, in Puerto Rico.
Combs was taken into custody on Monday and according to an indictment unsealed Tuesday he was charged with sex trafficking, racketeering conspiracy and transportation to engage in prostitution.
His attorney Marc Agnifilo told CBS News, “It’s impossible to prepare for a trial from where he is,” after a first federal judge denied Combs bail on Tuesday.
U.S. Magistrate Judge Robyn Tarnofsky agreed with prosecutors who argued the hip-hop mogul, who is accused of using his business empire as a criminal enterprise to conceal his alleged abuse of women, is a flight risk and poses an ongoing threat to the safety of the community.
Agnifilo said the part of the detention center where Combs is being held is “a very difficult place to be.”
contributed to this report.
