Instant Reaction: Mortgage Rates, February 1, 2024

Mortgage interest rates ticked down slightly this week to 6.63% from 6.69% the previous week. This change does not make a measurable difference in the monthly mortgage payment for a buyer—just $13 for a $400,000 home with 20% down. But what is clear for buyers, and what should be encouraging, is rates are down considerably from October 2023 and have been steady for seven consecutive weeks. For a $400,000 home with a 20% downpayment, the typical monthly payment is $2,050--$251 less than a buyer may have had in the Fall when rates were at their most recent peak.

Mortgage interest rates are expected to stay in the 6% range this year. While this is certainly higher than the historic lows seen in 2020 and 2021, this is lower than the historical norm (from 1971), which was 7.74%. The Federal Reserve is expected to cut the Fed Funds rate at least four times throughout 2024, which will put pressure on mortgage interest rates to lower. For serious buyers, consult with your experts—mortgage broker and REALTOR®- to plan your next steps as Spring approaches.