2024 mortgage interest rate forecast

Rates steady at 6.5%

Updated: Oct 14th, 2024

Current interest rate forecast

Mortgage rates have remained stable, largely due to the lack of significant labor market news. After a sharp increase of nearly half a percent from September’s lows, rates have now settled around 6.5% for a 30-year fixed mortgage. Interestingly, the lowest rates this year occurred just before the Fed cut the Federal Funds rate. This highlights that it’s not necessarily the Fed’s immediate actions, but the market’s expectations for the future path of interest rates, that truly impact the 30-year fixed mortgage rate.

Check out today’s rates here

Will interest rates go up or down this week?

We have a quiet week of data ahead of us, with just Core Retail Sales on Tuesday.

How will rate changes impact homebuyers?

The recent drop in mortgage rates—from a high of 7.875% to today’s 6.5%—will save the typical homebuyer $253 per month and $135,000 over the course of a 30-year loan. Another way to look at it: a typical buyer can now spend nearly 15% more on a home, or roughly $40,000, and still maintain the same monthly payment. So, while rates have risen from where they were at the end of September, buyers are still seeing much higher savings compared to recent months.

Calculations based on a $400k home price with an 8% down payment, and a 740 credit score

Current mortgage rates

You can see personalized rates on our current mortgage rates page (we promise they are real rates for real people).

Product	Rate- Oct. 14	Rate- Oct. 7th	Change
30 Year Fixed	6.5%	6.5%	no change
30 Year Fixed – VA	6.0%	5.875%	0.125% increase
30 Year Fixed – FHA	5.75%	5.75%	no change
30 Year 7/6 ARM	7.50%	7.50%	no change
15 Year Fixed	5.875%	6.0%	0.125% decrease

Mortgage rate predictions?

At the beginning of the year, we predicted a macro shift to lower rates sometime in the summer and four 25-bps rate cuts for 2024. That macro shift occurred in August, when the BLS published a far weaker than expected Labor Market Report pushing our rates for a 30yr mortgage down as far as 6%. The market got ahead of itself projecting Fed rate cuts, again, and at the close of Q3 our 30yr benchmark is right on our prediction of 6.5%. Expect a gradual decline to the end of the year.

Quarter	Prediction	Actual
Q1 2024	6.875%	6.875%
Q2 2024	6.625%	7.0%
Q3 2024	6.5%	6.5%
Q4 2024	6.5%

What might cause rates to increase or decrease this week?

Core Retail Sales (Tuesday – 8:30 AM):
Core Retail Sales measures consumer spending across various products, excluding automobiles, making it a key indicator of U.S. consumer health. A weaker-than-expected result typically benefits mortgage rates, as lower economic growth tends to push rates down. This month’s forecast is for a 0.1% increase, flat compared to last month.

Weekly Jobless Claims (Thursday – 8:30 AM):
Last week’s jobless claims surged to nearly 260,000, the highest in over a year, exceeding expectations. In this stage of the economic cycle, jobless claims data holds more weight in influencing interest rate expectations than employment growth figures. This week’s forecast is 240,000, and another higher-than-expected reading could lead to a drop in mortgage rates.

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