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Will mortgage rates drop this summer? Here’s what experts say
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While many experts predicted that mortgage rates would start falling quickly in 2024, inflation has remained higher than many expected. The latest annual inflation rate for the Consumer Price Index for All Urban Consumers (CPI-U) came in at 3.4%, according to the Bureau of Labor Statistics. And, amid relatively hot data like this, the Federal Reserve has continued to hold the federal funds rate steady since July 2023.
While the Fed does not directly dictate mortgage rates, its policy decisions can influence consumer interest rates. As such, mortgage interest rates remain roughly in line with where they were last summer, with 30-year fixed-rate mortgages generally in the low 7% range, according to Freddie Mac data.
Today’s high rates can make buying a home expensive, so many prospective buyers are keeping an eye on mortgage interest rate forecasts and waiting for a mortgage interest rate drop. But will buyers get relief this summer or will they have to keep waiting?
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Will mortgage rates drop this summer? Here’s what experts say
If you’re wondering whether mortgage rates will drop this summer, here’s what some experts are saying about the possibility:
The case for mortgage rates dropping this summer
Even if the June Federal Reserve meeting doesn’t move the needle much, expectations around future rate cuts could help send mortgage rates down.
“I believe mortgage rates will drop this summer, but not substantially. With the expectation that the Fed will not start cutting the fed funds rate until the fall, mortgage rates will heavily rely on weekly economic data, rather than the summer Fed meetings,” says Brian Shahwan, VP mortgage banker and broker with The Melissa Cohn Group at William Raveis Mortgage.
However, there could be ups and downs along the way as this economic data rolls in, Shahwan notes.
“The stronger the data comes in, the higher the mortgage market will be pushed. Similarly, with weaker economic data and inflation numbers cooling, we’ll continue to see mortgage rates softening. For this reason, it is a good idea for buyers to work with a lender that can lock at a dip and/or offer a float-down option. A float down allows borrowers to relock at a lower rate, if the market improves before closing,” says Shahwan.
It’s also possible that increased homebuying demand could drive mortgage rates down slightly as lenders compete to scoop up this business. However, the effect could be minor.
“Personally, I do not believe we will see a meaningful drop in mortgage rates by the end of summer 2024. Borrowers should expect rates to remain relatively consistent, with only marginal decreases during the summer house-hunting season,” says Tai Christensen, co-founder and president at Arrive Home.
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The case for mortgage rates not dropping until later
While Christensen sees a possibility of marginal decreases this summer, she and many other experts primarily expect rates to fall later on.
“The good news is the mortgage interest rate forecasts are reflecting a gradual decrease through year-end, if the Fed is satisfied with the decrease in inflation. I believe by the end of 2024, we will see rates fall to closer to the mid to slightly lower 6% interest,” says Christensen.
Similarly, Brian Durham, vice president of risk management and managing broker at Realty Group LLC and Realty Group Premier, says he’s “not optimistic about mortgage rates this summer” but projects more of a decrease in late 2024.
“With the recent inflation numbers and the continued deficit spending coming out of Washington, I think mortgage rates will stay steady through the summer and then trend downward into the low to mid-6% range in the fourth quarter,” he says.
Even if economic data shows signs of a slowdown — which can translate into lower mortgage rates — it can take time for these changes to play out.
“Much like looking in the rear-view mirror, there is often a delay in the trajectory of interest rates until economic changes occur, and then make their way to the index reports. For that reason, we may need to see a few more reporting cycles before we see any substantial decrease in interest rates,” says Josh Jampedro, mortgage expert at Home Loan Advisors.
“It has become clear that mortgage rates will soon point lower, but the projection for this decrease is likely late 2024 or even early 2025 once a shift in the economy becomes more obvious,” he adds.
The bottom line
With inflation still relatively high, it could take more time for mortgage rates to come down. It’s possible that there will be a slight decrease this summer, but the consensus seems to lean more toward meaningful interest rate changes coming later this year or in early 2025.
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Hearing the voice of Sir Laurence Olivier catch you up on work memos may not offer the same thrill as watching the acclaimed English actor on stage or screen, but it could make your morning commute more interesting.
That’s the vision of artificial intelligence startup ElevenLabs, which this week announced that fans of Hollywood icons such as Judy Garland and James Dean can now listen to the voices of the deceased film stars narrate books, articles and other digital text.
The company said it had reached agreements with the estates of Olivier, Garland, Dean and Burt Reynolds to add their voices to a library of AI-generated voices on ElevenLab’s new Reader App. The product lets users listen to text on your phone, with the actors’ voices available for individual streaming.
ElevenLabs did not provide details about any financial compensation it is offering to the actors’ estates.
“We deeply respect their legacy and are honored to have their voices as part of our platform,” Dustin Blank, head of partnerships at ElevenLabs said in a blog post. “Adding them to our growing list of narrators marks a major step forward in our mission of making content accessible in any language and voice.”
Liza Minnelli, Judy Garland’s daughter and the representative of her estate, said in the post that her family is excited to “see our mother’s voice available to the countless millions of people who love her.”
Using AI to recreate a version of someone’s voice has drawn negative attention after being used in nefarious ways, including the creation earlier this year of a phony robocall from President Joe Biden urging people not to vote in New Hampshire’s presidential primary.
In another incident, actress Scarlett Johansson is May said she was “shocked, angered and in disbelief” after discovering that a voice option on OpenAI’s ChatGPT app sounded like her. Johansson had declined OpenAI founder Sam Altman’s offer to voice ChatGPT’s text-to-speech product. Altman said the voice is not Johansson’s.
AI was a key issue in the SAG-AFTRA strike last year. A new actor contract includes limits on artificial intelligence. Producers for TV and film must get consent from actors to use a digital replica, and performers are also entitled to compensation for using AI to create their virtual likeness.
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Candidates in pivotal French legislative elections drop out in tactical move ahead of final vote
Paris – As France prepares for a decisive second-round vote Sunday, political parties from all persuasions are scrambling to secure seats in the National Assembly. However, more than 200 candidates – mostly from left and centrist parties – have dropped out in a tactical move to block the far right.
Marine Le Pen’s far-right National Rally (RN) party and its allies led the first round vote with 33.4%. However, after the significant number of withdrawals to avoid splitting the vote against the far right, it’s unlikely the RN can secure an absolute majority in this second round and form a government.
The RN is anti-immigration and has been accused of being antisemitic and anti-Muslim. It wants to roll back the power of the European Union in France and has threatened to pull the country out of the U.S.-led NATO military alliance.
There are 577 seats in the National Assembly, the lower house of parliament. Just 76 deputies were elected with an outright majority in the first round so the majority of seats are still up for grabs. A total of 289 seats is needed for that crucial absolute majority.
Final opinion polls on Friday predicted the RN and its allies would again lead the field – but would now only secure between 175 and 205 seats, well below the majority needed to form a government on their own, and below predictions in the immediate aftermath of the first round. However, that is more than double the number of seats held before these elections.
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The leftist group, Nouveau Front populaire, or New Popular Front, is predicted to take between 145 and 175 seats. That grouping of traditional left, hard left and green parties was hastily formed after President Emmanuel Macron called snap elections in June.
Macron hoped to rally voters against the far right after the RN did well in early June elections for the European parliament, which governs the European Union.
However, political analyst Douglas Webber told CBS News: “President Macron made a colossal error in judgment”.
His Ensemble – Together – centrist coalition for these parliamentary elections is tipped to win just 145-175 seats.
Polls predict voter turnout for this second round will be as high as 65%. That’s similar to the numbers for the first round on June 30. Turnout was unusually high as many voters said they either wanted to block the far-right, or just get rid of Macron’s government.
“Right now, we have big problems with the right wing,” said one young woman after the first round vote. “We want more democracy, you know, we don’t want people to feel afraid or scared about living in France.”
These elections have been marred by attacks on candidates. The interior ministry said 51 candidates or party activists – from different parties – were attacked during the short campaign. For Sunday’s vote, 30,000 police have been drafted in case of violence during polling or after the results are announced.
Initial predictions will be available shortly after the polls close in France on Sunday night. However, in the absence of an outright majority for one party or grouping, it may be days – or even weeks – before a government emerges.
RN president Jordan Bardella – who wants to be prime minister – has suggested that he would refuse to form a government if his party and allies do not win an outright majority. He argued that without a majority, his government could achieve little and, therefore, would not be worth it. Whether that is simply posturing to encourage all far-right supporters to vote in large numbers remains to be seen.
There is talk of a rainbow coalition of traditional left and right parties and centrists. But Macron made it clear on Wednesday at a meeting with his Council of Ministers, that blocking the far right did not mean that he would name a government led by the hard left LFI – La France Insoumise, or France Unbowed – led by Jean-Luc Melenchon. It remains to be seen if there would be enough deputies without the two extremes to form a government.
There is a third option. President Macron could decide to postpone forming a new government until after the Paris 2024 Olympic Games, which open on July 26. He could ask the current Prime Minister Gabriel Attal to continue in a caretaker role and then deal with the fallout of the elections once the Games are over.
