Mortgage Rates Forecast For 2024: Experts Predict How Much Rates Will Drop (2024)

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Mortgage rates have stayed below 7% so far in 2024—but not low enough to coax potential buyers into purchasing a home or homeowners into refinancing their loan.

For the week ending April 4, the average 30-year fixed mortgage rate stood at 6.82%, according to Freddie Mac.

Despite mortgage rates remaining stubbornly high, most housing market experts expect them to recede over 2024, assuming the Federal Reserve acts on its signaled interest rate cuts. However, whether mortgage rates fade enough to create a meaningful shift in home affordability remains uncertain.



Mortgage Rates Forecast For 2024: Experts Predict How Much Rates Will Drop (1)

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Mortgage Rate Predictions for 2024

Here is how some experts predict market conditions will affect the average 30-year, fixed-rate mortgage in 2024:

  • Freddie Mac. “We forecast mortgage rates to stay above 6.5% through this quarter and next.”
  • Fannie Mae Housing Forecast. The 30-year mortgage rate will end 2024 at 6.4%, up from 5.9% in the previous forecast. The average mortgage rate will remain at 6.7% in Q2.
  • National Association of Realtors chief economist Lawrence Yun. “The budget deficit remains high, and the various inflation metrics remain above the comfort level. That means the mortgage rates will likely be in the 6% to 7% range for most of the year.”
  • Mortgage Bankers Association (MBA). MBA’s baseline forecast is for the 30-year fixed-rate mortgage to end 2024 at 6.1% and reach 5.5% at the end of 2025 as Treasury rates decline and the spread narrows.
  • Bank of America head of retail lending Matt Vernon. “The Fed’s likely decision to cut rates in 2024 would be a key factor that could breathe new life into the housing market. However, it’s important to note that significant drops in mortgage rates might not happen in the early months of 2024. If any reductions occur, they are likely to be gradual, possibly beginning in the latter part of the year.”
  • MLS chief economist Dr. Lisa Sturtevant. “[D]uring the early part of the year, expect some bumpiness in rates as new economic data are released and as more buyers get back into the market. However, the overall outlook for mortgage rates in 2024 suggests more rate drops, with Bright MLS forecasts predicting rates to hit 6.2% by the fourth quarter.”
  • KPMG Economics senior economist Yelena Maleyev. “Mortgage rates are expected to stay below 7% in the coming months as inflationary pressures ease and the path to [Federal Reserve] rate cuts in the second quarter remains clear. Upside surprises to inflation, employment and wages in the coming months would make the Federal Reserve consider waiting even longer to cut rates, which would then push up other interest rates, including mortgages.”
  • Palisades Group managing member and chief investment officer Jack Macdowell. “The market has consistently overestimated the likelihood, timing, and quantity of the Federal Reserve’s rate cuts. Based on current data, it is hard to envision more than one to two cuts in 2024 and hard to see mortgage rates drop below 6.25%

Fed Holds Rates Steady, Again: What This Means for Mortgage Rates in 2024

In a widely expected move, the Federal Open Market Committee (FOMC) voted unanimously to leave the benchmark federal funds rate unchanged after its two-day March meeting. The federal funds rate is the overnight borrowing rate for commercial banks and credit unions and indirectly influences mortgage rates.

The decision marks the fifth consecutive meeting that the FOMC has kept its policy rate steady between 5.25% and 5.5%.

Over the past two years, mortgage rates have skyrocketed to their highest levels in decades amid the Fed’s efforts to tame inflation through aggressive interest rate policy actions. Rates have recently begun to recede—albeit sluggishly—due partly to the Fed’s rate-hike pauses.

The Fed’s latest summary of economic projections maintained the three planned rate cuts for 2024, but Federal Reserve Chair Jerome Powell reiterated the timing of those rate cuts will depend on more inflation data.

“We want more confidence that inflation is coming down sustainably toward 2%,” Powell said at a post-meeting press conference. The Fed also considers employment readings and other economic data in its decision-making process.

So, what does all this mean for mortgage rates?

“Inflation is still running hotter than the Fed would like and increased at a pace that is faster than the Fed wants to see,” said Melissa Cohn, regional vice president of William Raveis Mortgage, in an emailed statement.

Even so, Cohn expects the Fed to start cutting rates in June or July.

Since mortgage rates often react to the Fed’s actions, this latest pause means that home buyers may have to wait a bit longer to see improvements in affordability. In the meantime, motivated buyers and sellers will need to get creative.

Danielle Hale, chief economist at, said in an emailed statement that “options such as assumable mortgages—which allow a seller to let a buyer take over an existing mortgage, including the existing (likely lower) rate—can be a valuable hack for buyers who can find them.”

The next two-day FOMC meeting is April 30 to May 1.

Is 2024 a Good Time To Refinance?

Whether or not 2024 will be a good time to refinance depends on several factors, including if the Fed cuts interest rates this year and by how much. The mortgage rate you got when you financed your home is another major factor.

Over 40% of U.S. mortgages originated in 2020 and 2021, when interest rates were at record lows. There were also some 14 million mortgage refinances during the same time. If you were lucky enough to secure a mortgage during that time, then 2024 is likely not the ideal time to refinance.

“If rates are lower than when you first got your mortgage, it might be a favorable time,” says Vernon. However, whether rates go lower in 2024 will depend, in part, on economic conditions.

Experts believe that once the Fed cuts rates in 2024, refinance volume will improve as borrowers who took on high mortgage rates will jump at the chance to lower their monthly costs.

“If [mortgage] interest rates dropped to even 5.5%, it could result in significant savings for these homeowners, as refinancing at that rate could result in an average monthly payment of $1,917 for them, a reduction of $284 every month,” said Michele Raneri, vice president of U.S. research and consulting at TransUnion, in an emailed statement.

If you’re considering refinancing to lower your monthly payment, keep in mind that not all options yield less interest over the life of the loan.

“Remember that just because you can get a lower rate doesn’t mean you should immediately refinance,” says Vernon. “You may be paying a lower monthly mortgage, but you may have to also extend the life of your loan and refinancing could cost you more in interest.”

Current Mortgage Rate Trends

The average mortgage rate for a 30-year fixed is 7.12%, nearly double its 3.22% level in early 2022.

The average cost of a 15-year, fixed-rate mortgage has also surged to 6.55%, compared to 2.43% in January 2022.

In the current environment, ARMs might be more affordable than those with fixed rates. The latest average for a 5/1 ARM was 6.04%.

Current Mortgage Rates for April 2024

Loan termInterest rateAPRMonthly P&I Per $100,000

30-Year Fixed




15-Year Fixed




30-Year Jumbo




Source: Curinos

Current Mortgage Refinance Rates for April 2024

The current average rates for mortgage refinances are:

  • 30-year fixed: 7.21%
  • 15-year fixed: 6.75%
  • 30-year jumbo: 7.32%
  • 5/1 ARM: 5.96%

What Do Current Rates Mean for Refinancing in 2024?

Refinance volume remains at low levels. Here’s how refinance activity has trended recently, according to the MBA’s Weekly Mortgage Applications Survey.

Refinance ActivityWeekly Annually

Week ending March 6



Week ending March 13



Week ending March 20



Week ending March 27



For those hoping to refinance, mortgage rates are not cooperating.

By the end of March, the average 30-year fixed rate of 6.79% was close to half a percentage point higher than the same week a year ago, and refinance rates tend to be higher than purchase rates.

Meanwhile, many borrowers are sitting on the historically low mortgage rates they nabbed during the pandemic. Those rock-bottom rates are unlikely to return anytime soon—if at all—resulting in limited motivation for many homeowners to refinance.

“[W]ith rates remaining elevated, there is very little incentive right now for rate/term refinances,” said Joel Kan, vice president and deputy chief economist at MBA, in a press statement.

With the Fed pausing rate hikes across five consecutive meetings and signaling at least three policy rate cuts in 2024, refinance activity may gain steam, fueled by borrowers who purchased homes when rates were hovering near 8%.

Fannie Mae forecasts refinance origination volume to hit $397 billion in 2024, over a 13% downgrade from its previous forecast.

Pro Tip

Refinancing your mortgage is often a great financial move if you can qualify for a rate lower than your current rate and shorten your loan term. However, make sure you’ll remain in your home long enough to recoup the closing costs.

How To Get a Lower Mortgage Refinance Rate

The good news is that, despite elevated rates, there are methods you can employ to secure a lower rate. These methods might be especially beneficial if you bought a home between mid-October and early November 2022 or mid-August through early December 2023 when rates were over 7%.

Because there are closing costs and fees associated with refinancing, many mortgage experts say refinancing only makes sense if you can snag a rate that’s at least 1% lower than your current rate.

Here are some actions you can take to whittle down your refinance rate:

  • Get rate quote estimates from at least three lenders
  • Ask lenders about waiving or reducing closing costs
  • Negotiate with your lender to match the best deal
  • Take steps to strengthen your credit score
  • Save for a larger down payment
  • Choose a shorter-term loan
  • Buy discount points

Mortgage Rate Predictions for the Next 5 Years

While predicting mortgage rates for the next five years is a tall order, especially considering the unprecedented fluctuations over the past year, experts say the low housing inventory will be a key factor in where rates go over the long term.

“When rates come down, we’re going to be in store for another hot housing market where there are more buyers than sellers jacking up prices because we haven’t solved the problem” of low inventory, says Daryl Fairweather, chief economist at Redfin. “It’s still that affordability problem. That’s going to stay with us.”

As far as which direction interest rates go in the years ahead, Fairweather expects declines. However, the timeline for this downward trend remains uncertain.

“In every scenario, rates are going to come back down,” says Melissa Cohn, regional vice president at William Raveis Mortgage. “It’s just a matter of when.”

That “when” for Cohn won’t be in the immediate future—but she doesn’t see it as too far off.

“Mortgage rates will decline over the course of the next two to three years as the rate of inflation declines and hopefully gets to the Fed target of 2%,” Cohn says. “Mortgage rates will be at least a full 2% lower by 2025.”

She adds that if the inflation rate holds at 2%, then we should see mortgage rates remain at lower levels for the balance of the next five years.

What Affects Mortgage Rates?

A complex set of factors impact mortgage interest rates, including broader economic conditions, the monetary actions of the Federal Reserve (to some extent) and inflation. However, long-term mortgage rates are directly impacted by the bond market. The rate you’re offered on a mortgage will also depend on the lender you work with, its business costs and your financial profile.

Demand for mortgages can also affect rates, pushing them higher as available capital for lending tightens. Conversely, when there’s less borrower demand—as we’re seeing now due to average interest rates hovering in the high 6% to low 7% range—lenders might consider offering more competitive rates or other incentives to attract borrowers.

How To Shop For the Best Mortgage Rate

For buyers looking for relief, be patient. We expect to see mortgage rates begin to decline in the second quarter of 2024 as the Fed signals they are likely done with rate increases.” – Glenn Brunker, president of Ally Home

Getting an optimal rate on a home loan can save you a significant amount of money over time. Here are some tips that can help you get the best rate possible for your situation:

  • Keep your eye on rates. Mortgage rates are constantly changing. Keeping a close watch will make it easier to find and lock in a better rate.
  • Check your credit. When you apply for a mortgage, the lender will review your credit to determine your creditworthiness as well as your interest rate. In general, the higher your credit score, the better your rate will be. To get an idea of where you stand, check your credit before you apply and dispute any errors with the appropriate credit bureau to potentially boost your score.
  • Shop around and compare lenders. Consider options from as many mortgage lenders as possible to find the best deal for you. Prospective buyers have saved more than $1,500 over a loan’s term by getting two quotes from lenders and saved roughly $3,000 when they sought five quotes, according to Freddie Mac.

Faster, easier mortgage lending

Check your rates today with Better Mortgage.

Frequently Asked Questions (FAQs)

What are mortgage rates?

Mortgage rates are the costs associated with taking out a loan to finance a home purchase. Because properties cost so much, most people can’t pay for them with cash, so they opt to stretch the payments over long periods of time, often as much as 30 years, to make the regular monthly payments more affordable.

When interest rates rise, reflecting changes in the economy and financial markets, so too do mortgage rates—and vice versa.

What is a mortgage rate lock?

A mortgage rate lock is a guarantee that the rate you’re offered in your mortgage application acceptance is the one you will eventually pay, assuming you close within a normal period of time and make no changes to your application.

In a period of rising or volatile interest rates—like the present one—it may be wise to lock in a rate that seems affordable for you.

When should I lock my mortgage rate?

It can be tricky to time any market, and mortgage rates are no exception. If conditions are choppy, and interest rates are likely to rise, it may be smart to lock in a rate that works with your budget and seems fair to you.

Be sure to ask your lender about the consequences of not closing within the timeframe specified in a rate lock agreement and also about what could happen if rates fall after you lock in a rate.

How do you calculate your mortgage payment?

Depending on your loan type and other factors, the components of a monthly payment can vary but typically include:

  • Principal. The amount of funds you borrow from a lender for your mortgage.
  • Interest. The cost the lender charges you for borrowing the funds.
  • Property taxes. Payments are based on local property tax rates.
  • Homeowners insurance. A separate policy for insurance coverage based on the value of your home and property.
  • Private mortgage insurance (PMI). Typically only applies if you take out a conventional mortgage with a down payment below 20% of the purchase price.
  • Homeowners association (HOA) or condominium fees. Only applies if your property is part of an HOA or you own a condominium.
  • Escrow. An account reserved for property taxes, homeowners insurance and mortgage insurance, managed by the lender.
  • Additional costs. Examples of potential additional costs include home warranties and flood insurance.

Along with the above information, plug in the home price, down payment, interest rate and loan term into a mortgage calculator to determine the most accurate monthly mortgage payment estimate.

Will mortgage rates go down in 2024?

Given the many factors that directly and indirectly impact mortgage rates, predicting where rates will go in the years ahead is tricky. Nonetheless, experts foresee an inevitable downward trend, though probably not in the immediate future.

“[O]ur economic models don’t show mortgage interest rates declining anytime soon,” says Eric Fox, chief economist and senior vice president of analytics for Veros Real Estate Solutions. “Long term into 2024, we will see interest rates starting to have the desired impact in slowing the economy, but rates will need to remain elevated for some time.”

Fox says his models suggest that rates will hover at 7.5% or higher throughout 2024.

What is the mortgage rate forecast for the next five years?

The Fed’s economic projections indicate the federal funds rate will remain higher through 2025 and in the longer run than previously expected. Nevertheless, the projections show that cuts are in store. If those projections remain and the Fed begins to lower its key rate, mortgage rates will presumably follow suit.

Sunbury predicts the Fed will cut rates by between 100 to 125 basis points starting in May or June of 2024.

“This would bring the policy rate to 4% to 4.25%,” Sunbury explains.

And though Sunbury forecasts mortgage rates dropping, she doesn’t anticipate the imminent return of the rock-bottom rates we saw in 2021 and 2022.

“As inflation eases and the policy rate comes down, we should see 30-year fixed mortgage rates come down to the 5.5% to 6% range and remain around this range longer term,” she says.

Mortgage Rates Forecast For 2024: Experts Predict How Much Rates Will Drop (2024)


Mortgage Rates Forecast For 2024: Experts Predict How Much Rates Will Drop? ›

In its April Mortgage Finance Forecast, the Mortgage Bankers Association predicts that mortgage rates will fall from 6.8% in the first quarter of 2024 to 6.4% by the fourth quarter. The industry group expects rates will fall below the 6% threshold in the fourth quarter of 2025.

How much will interest rates drop in 2024? ›

Mortgage rate predictions 2024

The MBA's forecast suggests that 30-year mortgage rates will fall into the 6.4% to 6.7% range throughout the rest of 2024, and Fannie Mae is forecasting the same. NAR believes rates will average 7.1% this quarter and fall to 6.5% by the end of 2024.

What are mortgage interest rates expected to be in 2025? ›

The average 30-year fixed mortgage rate as of Thursday was 6.99%. By the final quarter of 2025, Fannie Mae expects that to slide to 6.0%.

Will auto interest rates go down in 2024? ›

McBride shares that while the high-rate environment will persist, rates will ease for most borrowers in 2024. Increased competition between lenders may help drivers secure a good rate. However, he warns, “don't expect auto loan rates to fall enough to offset the increases we've seen over the past couple of years.”

How high do they predict interest rates will go? ›

CBA, Westpac, and NAB predict that interest rates will come down in 2024 at the earliest and 2025 at the latest, potentially bringing the cash rate into neutral territory of around 3%, while ANZ researchers suggest the cuts may be further down the road. Either way, there may be mortgage relief on the horizon.

How low will interest rates go in 2025? ›

Here's where three experts predict mortgage rates are heading: Around 6% or below by Q1 2025: "Rates hit 8% towards the end of last year, and right now we are seeing rates closer to 6.875%," says Haymore. "By the first quarter of 2025, mortgage rates could potentially fall below the 6% threshold, or maybe even lower."

What will mortgage interest rates be in 2026? ›

The 10-year treasury constant maturity rate in the U.S. is forecast to decline by 0.8 percent by 2026, while the 30-year fixed mortgage rate is expected to fall by 1.6 percent. From seven percent in the third quarter of 2023, the average 30-year mortgage rate is projected to reach 5.4 percent in 2026.

What is the projected mortgage interest rate for 2024? ›

Mortgage giant Fannie Mae likewise raised its outlook, now expecting 30-year mortgage rates to be at 6.4 percent by the end of 2024, compared to an earlier forecast of 5.8 percent.

How much does it cost to buy down interest rates? ›

Doing so lowers the overall amount of interest they pay over the mortgage term. This practice is sometimes called “buying down the interest rate.” Each point the borrower buys costs 1 percent of the mortgage amount. One point on a $300,000 mortgage would cost $3,000.

What is a good mortgage rate? ›

Today's Mortgage Rates
Loan TypePurchaseRefinance
FHA 30-Year Fixed6.92%6.60%
VA 30-Year Fixed6.42%6.30%
20-Year Fixed6.78%6.99%
15-Year Fixed6.24%6.28%
9 more rows

Will bank interest rates go up in 2024? ›

While the federal funds rate climbed steadily in 2022 and 2023, rates have flattened and are expected to fall at some point this year. The CME FedWatch Tool, which measures market expectations for federal funds rate changes, shows that most experts expect rates to sit between 4.50% and 5.25% by December 2024.

How much is the car interest rate in 2024? ›

Average Auto Loan Rates in March 2024
Credit ScoreNew Car LoanRefinance Car Loan
750 or higher12.77%7.89%
1 more row

What interest rate can I get with a 800 credit score car loan? ›

Average auto loan interest rates by credit score
Personal FICO scoreAverage interest rate for new car loansAverage interest rate for used car loans
781 to 8505.64%7.66%
661 to 7807.01%9.73%
601 to 6609.60%14.12%
501 to 60012.28%18.89%
1 more row
Mar 4, 2024

What will interest rates look like in 2025? ›

The median estimate for the fed-funds rate target range at the end of 2025 moved to 3.75% to 4%, from 3.5% to 3.75% in December.

Will high interest rates go down? ›

The central bank said it does not anticipate cutting interest rates until it's confident that inflation is moving sustainably downward. "So far the data has not given us that greater confidence," Fed Chair Jerome Powell said at a press conference in Washington, D.C., last Wednesday.

Is it better to fix a mortgage now? ›

Forecasters believe mortgage rates may fall further in 2024, meaning it may be wise to opt for a variable rate or tracker mortgage for the time being, and fixing your mortgage once rates do slide. For a more accurate steer, it's a good idea to engage a mortgage advisor when you're ready to choose a mortgage.

Will interest go up in 2025? ›

The median estimate for the fed-funds rate target range at the end of 2025 moved to 3.75% to 4%, from 3.5% to 3.75% in December.

What is the expected trend of Fed funds interest rates through 2024 Chegg? ›

Initially higher ratespeeking around 5.2% in 0324, then gradually lower rates falling to around 4.5% in late 2024 .

Will interest rates go down for cars? ›

Prediction: Auto loan rates edge down to 7%

However, rate cuts from the Fed will take some of the edge off of the rising cost of financing a car, McBride said, helped in part by competition between lenders. McBride expects five-year new car loans to drop to 7% by the end of the year.

What is the Fed meeting in March 2024? ›

Contributors. The Federal Reserve (Fed) announced at its March 2024 meeting that it would maintain the overnight federal funds rate at the current range of 5.25% to 5.5%.


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