From Time:

Homebuyers could be in line for a big break by year-end. Mortgage rates are expected to dip under 6% for the first time since September 2022. Recent Fannie Mae report predicts 30-year fixed-rate loan to average 5.8% by year end. Rates have already decreased by more than a percentage point since last October.

But don’t expect rates to follow a straight line down. Many factors could cause economic conditions to reverse and lead Fed to adjust its plans. Mortgage rates are influenced by the bond market, which reacts to even every new tidbit of economic news.

Reginald says these factors will smooth down. 2021 was an outlier, with over six million homes sold, and 2023 had total home sales plummeted to less than four million. Fannie Mae is now forecasting that there will be around 4.5 million home sales by the end of the year. AD: Here are the Best Mortgage Refinance Companies of 2024

Housing inventory has also been a challenge for homebuyers. Housing supply has been running low since the end of the 2008 market crash and has been unable to satisfy demand. As a result, inventory was low when the pandemic boom hit, exacerbating the shortage of available homes for sale. Current inventory is running at about a 3-month supply, which is way too low to keep up with “normal” demand.

Low rates are unlikely to meaningfully improve the situation. Because demand is likely to continue to outpace supply, home prices are expected to increase, but at a slower pace compared to recent years. Fannie Mae expects home prices to increase by 3.2% in 2024, compared to 7.1% in 2023.



Read more: Mortgage Rates Will Drop Below 6%: Fannie Mae Forecast