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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.
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President-elect Donald Trump fired another salvo in his long-running effort to have his New York criminal conviction tossed, with his attorneys alleging earlier this month that there was juror misconduct during his trial.
In a previously undisclosed Dec. 3 letter to Justice Juan Merchan that was made public Tuesday, Todd Blanche and Emil Bove wrote that there was “grave juror misconduct” in the proceedings in a Manhattan courtroom earlier this year.
However, heavy redactions in the letter and subsequent exchanges with prosecutors obscured almost all information about the accusations themselves.
“The jury in this case was not anywhere near fair and impartial,” they wrote.
Merchan on Tuesday directed Trump to make the redacted letter public, and instructed prosecutors to publish their own redacted responses. The judge also criticized Trump’s lawyers for making such serious allegations without sworn statements.
Prosecutors called the allegations “vague accusations of juror misconduct” in one of their responses. They claimed Trump’s attorneys did not want to have the allegations subject to investigation or a public hearing.
“Notwithstanding the import of their allegations, counsel do not request and in fact oppose a hearing at which their allegations could be fully examined, referring to such a hearing as ‘invasive fact-finding,'” wrote a prosecutor for Manhattan District Attorney Alvin Bragg.
Still, they argued such an investigation wasn’t yet appropriate.
“Counsel’s allegations fall far short of the standard required to request such a hearing in any event,” they wrote.
It is unclear if the allegations relate to a June 7 letter from Merchan that alerted prosecutors and Trump’s attorneys to a comment left on the court’s Facebook page the night before Trump’s conviction.
“My cousin is a juror and says Trump is getting convicted,” the user wrote. “Thank you folks for all your hard work!!!!”
The person who made the comment had previously described themselves as a “professional s**tposter.”
Trump was found guilty in May of 34 counts of falsifying business records, connected with a scheme to cover up a “hush money” payment to an adult film star. He pleaded not guilty and is contesting the conviction on multiple fronts.
Japanese automakers Honda Motor and Nissan Motor are reportedly entering merger talks to help them compete against Tesla and other electric vehicle makers, according to the Nikkei financial newspaper.
The two firms are considering operating under a single holding company, and are expected to sign a memorandum of understanding for the new entity, according to the Tokyo-based Nikkei.
The paper also reports that Honda and Nissan are considering bringing in Mitsubishi Motors, of which Nissan is the top shareholder, under the holding company to create one of the world’s largest auto groups.
In a statement to CBS MoneyWatch, Nissan said it has not announced the details in the report, but that the two companies “are exploring various possibilities for future collaboration, leveraging each other’s strengths,” which it announced in March.
Honda did not immediately respond to CBS MoneyWatch’s request for comment.
In March, Japan’s number two and three automakers, after rival Toyota, deepened ties when they agreed to explore a strategic partnership on electric vehicles.
Analysts characterized the move as one that is aimed at helping the automakers catch up with Chinese competitors, including BYD, which have captured more market share, while Japanese firms have lost ground by focusing more on hybrid vehicles.
China overtook Japan as the world’s biggest vehicle exporter in 2023, aided in part by its dominance in the electric car space.
Honda announced plans in May to double its investment in electric vehicles to $65 billion by 2030, as part of a target set three years ago of achieving 100% EV sales by 2040.
Similarly, Nissan in March announced that 16 of the 30 new models it plans to launch over the next three years would be “electrified.”
Climate concerns drive demand
The world’s auto giants are increasingly prioritizing electric and hybrid vehicles, with demand growing for less polluting models as concern about climate change grows.
At the same time, however, consumer demand for EVs has slowed amid high prices, range anxiety and developing infrastructure around charging points.
Hybrids that combine battery power and internal combustion engines have remained popular in Japan, accounting for 40% of sales in 2022.
But Japanese firms’ focus on hybrids has left them in the slow lane in meeting the growing appetite for purely electric vehicles. Just 1.7% of cars sold in Japan in 2022 were electric, compared to 15% in western Europe and 5.3% in the United States.
