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Here’s when mortgage interest rates could fall below 6%
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It may be hard to believe now, but it wasn’t that long ago that mortgage interest rates were near historic lows. On August 27, 2020, the average rate on a 30-year loan was 2.91%. One year later, it had dropped even further to just 2.86%. However, as the pandemic and influencing economic factors waned, inflation rose dramatically and by June 2022 it was at a 40-year high. Interest rates soon followed, and by August 2023, the average mortgage interest rate had more than doubled to 7.31% – the highest level since 2000.
But the rate climate is changing once again.
Inflation has cooled significantly so far in 2024, dropping in the last four consecutive months. And while the Federal Reserve has kept the federal funds rate frozen at a range between 5.25% and 5.50%, cuts appear imminent for September. And when those are finally issued, rates on mortgages will once again begin to drop. While today’s average 6.57% rate for a 30-year mortgage still seems high, it may not be that elevated for much longer. Mortgage interest rates could fall below 6% sooner than some borrowers may anticipate. Below, we’ll detail when this change could take place.
See how low of a mortgage interest rate you could secure here now.
Here’s when mortgage interest rates could fall below 6%
Projections on how much the Federal Reserve will cut interest rates — and when they will do it — vary from economist to economist. What most seem to agree on, however, is that a cut is imminent for the Fed’s next meeting, set to conclude on September 18. The CME FedWatch tool has it pegged at 100% certainty. While the Fed doesn’t directly dictate what lenders offer borrowers, it does influence them. So if a 25 basis points cut is issued then, mortgage rates could, in theory, drop to 6.32% from today’s 6.57%. But that’s assuming today’s rate hasn’t always “priced in” a September cut. If lenders have, then that rate won’t move downward much further in September.
But the Federal Reserve will meet again on November 6 and November 7. And if inflation data at that point has still been encouraging, it’s possible they could drop the federal funds rate by another 25 basis points or even half a percentage point. Using today’s 6.57% rate as a baseline, mortgage rates will hover just over 6% then.
It’s the final Fed meeting of the year, however, slated for December 17 and December 18, when mortgage interest rates are likely to fall below the 6% threshold. Even a simple 25 basis point reduction then should result in a sub-6% rate. But if the Fed feels safe becoming more aggressive, rates could even fall to the mid-to-high 5% range.
Still, it’s important to remember that there’s not a direct correlation between the Fed and mortgage rate lenders. Lenders may price future rate cuts into their offers in advance, so it’s possible (if not likely) that mortgage rates could fall below 6% before December. But using today’s rough trajectory — and an assumption that no new economic data halts cuts — borrowers can generally expect to see rates in the 5% range sometime in the final weeks of 2024.
Start exploring your current mortgage rate options online.
The bottom line
Predicting the future of interest rates, particularly for specific borrowing products, can be an inexact science, reliant upon multiple unknown factors. But if inflation continues to cool, pressure will increase on the Fed to cut rates. Still, formal rate cuts don’t need to take place for lenders to offer lower rates on mortgages (they’ve already dropped more than a full percentage point since the end of 2023 absent a formal cut). So monitor the rate climate, improve your credit and start house hunting now. The time to secure a sub-6% mortgage interest rate could be sooner than you think.
The International Brotherhood of Teamsters says workers at seven Amazon facilities will begin a strike Thursday morning in an effort by the union to pressure the e-commerce giant for a labor agreement during a key shopping period.
The Teamsters say the workers, who authorized walkouts in the past few days, are joining the picket line after Amazon ignored a Dec. 15 deadline the union set for contract negotiations. Amazon says it doesn’t expect any impact on its operations during what the union calls the largest strike against the company in U.S. history.
The Teamsters say they represent nearly 10,000 workers at 10 Amazon facilities, a small portion of the 1.5 million people Amazon employs in its warehouses and corporate offices.
Amazon is ranked No. 2 on the Fortune 500 list of the nation’s largest companies.
At a warehouse in the New York City borough of Staten Island, thousands of workers who voted for the Amazon Labor Union in 2022 and have since affiliated with the Teamsters. At the other facilities, employees – including many delivery drivers – have unionized with them by demonstrating majority support but without holding government-administered elections.
The strikes happening Thursday are taking place at an Amazon warehouse in San Francisco and six delivery stations in southern California, New York City, Atlanta and the Chicago suburb of Skokie, Illinois, according to the union’s announcement. Amazon workers at the other facilities are “prepared to join” them, the union said.
“Amazon is pushing its workers closer to the picket line by failing to show them the respect they have earned,” Teamsters General President Sean M. O’Brien said in a statement.
“If your package is delayed during the holidays, you can blame Amazon’s insatiable greed. We gave Amazon a clear deadline to come to the table and do right by our members. They ignored it,” he said.
The Seattle-based online retailer has been seeking to re-do the election that led to the union victory at the warehouse on Staten Island, which the Teamsters now represent. In the process, the company has filed a lawsuit challenging the constitutionality of the National Labor Relations Board.
Meanwhile, Amazon says the delivery drivers, which the Teamsters have organized for more than a year, aren’t its employees. Under its business model, the drivers work for third-party businesses, called Delivery Service Partners, who drop off millions of packages to customers everyday.
“For more than a year now, the Teamsters have continued to intentionally mislead the public – claiming that they represent ‘thousands of Amazon employees and drivers’. They don’t, and this is another attempt to push a false narrative,” Amazon spokesperson Kelly Nantel said in a statement. “The truth is that the Teamsters have actively threatened, intimidated, and attempted to coerce Amazon employees and third-party drivers to join them, which is illegal and is the subject of multiple pending unfair labor practice charges against the union.“
The Teamsters have argued Amazon essentially controls everything the drivers do and should be classified as an employer.
Some U.S. labor regulators have sided with the union in filings made before the NLRB. In September, Amazon boosted pay for the drivers amid the growing pressure.
NEW YORK — The Teamsters union is launching a strike against Amazon at numerous locations across the country, including in Maspeth, Queens.
The Teamsters are calling it the largest strike against Amazon in United States history, and it’s set to begin at 6 a.m. Thursday. In addition to New York City, workers will be joining picket lines in Atlanta, Southern California, San Francisco and Illinois.
In a video announcement released Wednesday night, workers voiced their frustrations.
“Us being strike ready means we’re fed up, and Amazon is clearly ignoring us and we want to be heard,” one worker says in the video.
“It’s really exciting. We’re taking steps for ourselves to win better conditions, better benefits, better wages,” another worker in the video says.
The union says it represents about 10,000 Amazon employees and that Amazon ignored a deadline to come to the table and negotiate. The $2 trillion company doesn’t pay employees enough to make ends meet, the union asserts.
At the height of the holiday season, many are wondering what this means for packages currently in transit.
Teamsters President Sean O’Brien said, “If your package is delayed during the holidays, you can blame Amazon’s insatiable greed.”
Amazon says Teamsters are misleading the public
An Amazon spokesperson says the Teamsters are misleading the public and do not represent any Amazon employees, despite any claims.
“The truth is that the Teamsters have actively threatened, intimidated, and attempted to coerce Amazon employees and third-party drivers to join them, which is illegal and is the subject of multiple pending unfair labor practice charges against the union,” the spokesperson said in a statement.
An Amazon representative says the company doesn’t expect operations to be impacted.
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