CBS News
How to avoid ticket scams during concert and holiday show season
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
CBS News
Here’s what could happen with mortgage rates this December, according to experts
The economic environment has shifted over the past few months amidst the election, Federal Reserve rate cuts and stronger-than-expected job growth. However, the housing market remains in a bit of a gridlock.
Buying a home can be challenging right now with home prices high, existing homes in short supply, and interest rates still relatively elevated. According to Harvard University, the U.S. home price index is 47% higher than in 2020, and existing housing inventory is down 34% from 2019.
Lawrence Yun, chief economist of the National Association of Realtors, notes that 2023 and 2024 were difficult years for home sales but the worst may be over with.
One of the key shifts many prospective homebuyers are waiting for is lower mortgage rates — which we’ve recently seen some signs of. Below, we’ll take a closer look at the mortgage rate trends over the past year and what experts predict will happen this December.
Start by seeing what mortgage interest rate you could qualify for here.
Mortgage rate trends in 2024
The average 30-year fixed mortgage rate fluctuated between 6.5% and 7.5% during the first half of 2024. July then marked the start of a downward trend which reached its lowest point at 6.08% in September, coinciding with the first Fed rate cut of 0.50%. Since then, rates have climbed back up and stabilized in the high-6% range, despite another 0.25% rate cut in November.
“Last month, the jobs report came back better than expected. Unfortunately, to ease mortgage rates, unemployment still needs to rise and new jobs added to be reduced,” says Jeremy Schachter, branch manager at Fairway Independent Mortgage Corporation in Arizona.
The 10-year treasury rate followed a similar trend to the average mortgage rate, dipping to 3.63% in September before climbing to 4.44% in November.
“Mortgage rates and 10-year treasuries are not the same. But, for the most part, the mortgage rates do track the movement in the 10-year treasury,” says Kevin Leibowitz, founder of Grayton Mortgage in New York.
Leibowitz explains that the 3.63% low in September was in advance of the Fed’s first rate cut of this cycle. “After the election, rates got worse – the market felt that some of the potential policies that would be put forth by the Trump administration would be inflationary,” he says.
However, Leibowitz thinks the post-election rate jump was a bit overdone and we’re now settling into a wait-and-see environment. “We’re not seeing wild swings up and down. That lack of volatility, in addition to the lower absolute rates, is helping provide a downward trend in mortgage rates,” Leibowitz says.
Explore your current mortgage options to learn more here.
Mortgage rate outlook: What experts predict for December 2024
If you’re thinking about buying a home soon, every tenth of an interest rate point matters. Here’s where some experts predict rates will land in December:
- Mid to lower 6’s: “I see 30-year fixed rates in the mid-to low-6% range by the end of the month – barring any unusual financial or political news,” says Leibowitz.
- Mid to upper 6’s: “I expect rates to be in the mid to upper 6’s through the end of 2024,” says Schachter.
- Upper 6’s: “We might see rates close out 2024 lower than 7%, but I wouldn’t expect us to get out of the 6% range until potentially Q1 of 2025,” says Joe Muck, realtor at J Muck Realty in Michigan.
- Upper 6’s: Realtor.com forecasts a 6.7% year-end mortgage rate.
December will bring another Federal Open Market Committee meeting and potentially another Fed rate cut, but Lebowitz says it’s already accounted for. “The Fed is scheduled to meet December 17th/18th, and the anticipated 0.25% cut that the market expects to be announced is already reflected in the 10-year treasury rate,” he says.
While mortgage rates don’t look like they’ll fall much throughout December, decreases are more likely over the next few years. Yun predicts six to eight more Fed rate cuts in this cycle and thinks mortgage rates will bounce around between 5.5% and 6.5% over the next four years.
CBS News
What to know about the toppling of Bashar al-Assad’s regime in Syria
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
CBS News
82nd annual Golden Globe nominees announced
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.