Homebuyers will soon have an added layer of protection when shopping around for a mortgage due to the new Homebuyers Privacy Protection Act. The new law is designed to prohibit the abuse of what’s known as trigger leads, which are when credit bureaus sell a borrower’s information immediately after a mortgage credit inquiry. The law makes it illegal for credit bureaus to do so without consumers’ consent.
“This new law is a major victory for mortgage borrowers that will protect them from the barrage of unwanted calls, texts, and emails they too often received immediately after applying for a mortgage,” said Mortgage Bankers Association President and CEO Bob Broeksmit. “It will create a more efficient, responsible, and respectful homebuying process when it goes into effect on March 5, 2026.”
Many experts expect rates to fall below 6% in 2025, but the forecast is far from guaranteed. In January 2023, some analysts thought that rates would be around 4.5% by the end of 2024, which is obviously not happening.
Fed Chair Jerome Powell says it best: “Forecasting’s are highly uncertain….Forecasting is very difficult.”
Rates will likely continue moderating in 2025 and 2026 but will stay relatively high as long as the economy keeps outpacing expectations, but over-all economists don’t anticipate a dip into the 3% or 4% range in the foreseeable future.
Here are the mortgage rate predictions as reported by US News:
• Fannie Mae: Rates Will Average 5.7% in 2025
The October Housing Forecast from Fannie Mae puts the average 30-year fixed rate at 6% by year-end, a decline from 6.5% in the third quarter. All told, the mortgage giant predicts mortgage rates will average 6.6% in 2024 and 5.7% in 2025.
• MBA: Rates Will Fall to 5.9% in 2025
The Mortgage Bankers Association predicts in its October Mortgage Finance Forecast that mortgage rates will fall from 6.5% in the third quarter of 2024 to 6.3% by the fourth quarter. The industry group expects rates will fall to 5.9% in the third quarter of 2025 and will continue declining to 5.9% in late 2025 and early 2026.
• NAHB: Rates Will Average 5.94% in 2025
The National Association of Home Builders expects the 30-year mortgage rate to average 5.94% in 2025, falling to 5.69% in 2026, according to its October Housing and Interest Rate Forecast. The trade group is forecasting that “sustained, sub-6% mortgage interest rates” will begin in the second quarter of 2025, something it previously forecasted to happen in the fourth quarter.
• Wells Fargo: Rates Will Average 5.86% in 2025
In its latest U.S. Economic Outlook, the Economics Group of Wells Fargo Bank puts the 30-year conventional mortgage rate at 6.3% in the fourth quarter of 2024 – a slight increase from when rates dipped in the third quarter. Wells Fargo economists predict that the average rate will dip below 6% in the second quarter of 2025, which is pushed further out from their previous forecast that expected sub-6% rates in the first quarter.
According to a new Zillow Home Loans analysis, a monthly mortgage payment is actually less expensive than rent in 22 of the 50 largest U.S. metros. Recent dips in mortgage rates, which have fallen to the lowest level since early 2023, have significantly reduced monthly payments.
Locally, the median rent in the Charleston market is $2800 / month (this varies by submarkets) and is 33% higher than the national median.
The Lower rates have been much anticipated and is making home ownership more affordable for many buyers.
If you have considered buying a home, I would love to help you through the process, feel free to contact me anytime!
Mortgage rates continued to decline! While mortgage rates do not directly follow moves by the Federal Reserve, this first cut in over four years had an impact on the housing market. Declining mortgage rates over the last several weeks indicate this cut was mostly baked in and may even fall further.
The recent drop in mortgage rates increases a buyer’s purchasing power – it is better than it’s been in almost two years AND there are more houses to choose from.
The chart below shows the mortgage rates affect in payment.
After the latest reports on the economy, inflation, the unemployment rate, and the Federal Reserve’s recent comments, mortgage rates started dropping. And according to Freddie Mac, they’re now at a level we haven’t seen since February – see graph below:
The Relationship Between Rates and Demand
In the housing market, there’s generally a relationship between mortgage rates and buyer demand. As rates go down, buyer demand typically increases. Buyers who were on the fence over higher rates may resume their searches.
“If you’re ready to buy, now might be the time to strike. Home prices have been rising primarily because of a longstanding shortage of homes for sale. That’s unlikely to change, and if mortgage rates do fall below 6%, it’s possible buyers would enter the market in masse, further pushing up prices and resurrecting bidding wars.”
If you’re ready to start the process, I’d love to help! Feel Free to contact me anytime!
As we move into the second half of 2024, here’s what experts say you should expect for home prices, mortgage rates, and home sales.
Home Prices Are Expected To Climb Moderately
Home prices are forecasted to rise at a more normal pace. The graph below shows the latest forecasts from seven of the most trusted sources in the industry:
The reason for continued appreciation? The supply of homes for sale. Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), explains:
“One thing that seems to be pretty solid is that home prices are going to continue to go up, and the reason is that we don’t have housing inventory.”
While inventory is up compared to the last couple of years, it’s still low overall. And because there still aren’t enough homes to go around, that’ll keep upward pressure on prices.
If you’re thinking of buying, the good news is you won’t have to deal with prices skyrocketing like they did during the pandemic. Just remember, prices aren’t expected to drop. They’ll continue climbing, just at a slower pace.
Mortgage Rates Are Forecast To Come Down Slightly
One of the best pieces of news for both buyers and sellers is that mortgage rates are expected to come down a bit, according to Fannie Mae, the Mortgage Bankers Association (MBA), and NAR (see chart below):
When you buy, even a small drop in mortgage rates can make a big difference in your monthly payments. For sellers, lower rates will bring more buyers back into the market, which can help you sell faster and potentially at a higher price.
Home Sales Are Projected To Hold Steady
For 2024, the number of home sales will be about the same as last year and may even rise slightly. The graph below compares the 2024 home sales forecasts from Fannie Mae, MBA, and NAR to the 4.8 million homes that sold last year:
The average of the three forecasts is about 5 million sales in 2024 – a small increase from 2023. Lawrence Yun, Chief Economist at NAR, explains why:
“Job gains, steady mortgage rates and the release of inventory from pent-up home sellers will lead to more sales.”
With more inventory available and mortgage rates expected to go down, a few more homes are expected to be sold this year compared to last year.
The average of the three forecasts is about 5 million sales in 2024 – a small increase from 2023. Lawrence Yun, Chief Economist at NAR, explains why:
“Job gains, steady mortgage rates and the release of inventory from pent-up home sellers will lead to more sales.”
With more inventory available and mortgage rates expected to go down, a few more homes are expected to be sold this year compared to last year. This means more people will be able to move.
If you have considered buying or selling, feel free to contact me anytime! I have 25 years’ experience and can help you navigate today’s market to reach your goals.
Mortgage rates continued to fall this week, with the average rate for a 30-year fixed home loan sinking from 6.95% last week to 6.87% for the week ending June 20, according to Freddie Mac.
“Mortgage rates fell for the third straight week following signs of cooling inflation and market expectations of a future Fed rate cut,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “These lower mortgage rates coupled with the gradually improving housing supply bodes well for the housing market.”
Mortgage rates have hovered around the 7% mark, fluctuating slightly above and below this benchmark for nearly two months, creating a market largely stuck in neutral.
“For mortgage rates to drop more, the [Federal Reserve] needs to see more evidence of slowing inflation vis-a-vis lower [Consumer Price Index] readings and moderating employment growth,” Ralph McLaughlin, a senior economist at Realtor.com, said in a statement.
“Overall, we anticipate inflation will continue to slow and will allow mortgage rates to decrease to around 6.5% by the end of 2024/early 2025,” he added.
The big picture: The more the economy shows signs of slowing, the more the market thinks that the Federal Reserve will cut interest rates, which in turn pressures mortgage rates down.
Many forecasters still expect mortgage rates to decline this year, but for now, stubborn inflation numbers are keeping rates higher than hoped.
Greg McBride, CFA, chief financial analyst for Bankrate stated. “It’ll be difficult for mortgage rates to post a meaningful and sustained pullback until there is greater consensus on what is next with inflation.”
It is expected that Mortgage rates will decline when the Federal Open Market Committee cuts the benchmark interest rate, which is likely to happen in the second half of 2024. But as long as inflation runs hotter than the Fed would like, rates will remain at their current levels.
“Strong incoming economic and inflation data has caused the market to re-evaluate the path of monetary policy, leading to higher mortgage rates,” says Sam Khater, Freddie Mac’s chief economist
Most economists agree that rates should pull back gradually during each quarter, but forecasters don’t see eye to eye on how far rates will eventually fall: Some believe rates will decline to around 6% by year-end, while others think rates will stay elevated in the mid-6% range. Here’s what experts have to say about their predictions for this year
While the interest rate determines the cost of borrowing money, the annual percentage rate (APR) is a more accurate picture of total borrowing cost because it takes into consideration other costs associated with procuring a loan.
Interest rate: The annual cost of borrowing the principal loan amount, expressed as a percentage, and does not include all fees.
APR: The annual cost of the loan, including fees, and reflects the true cost of borrowing. It is often higher than the interest rate.
Interest rates fluctuate based on various factors, including inflation, economic conditions, and Federal Reserve policies. Your personal financial situation can also affect the rate offered by a lending institute. Your credit score, debt ratio, down payment amount, loan type and over-all creditworthiness can influence the interest rate offered by a lending institute.
A loan’s annual percentage rate (APR) measures the total cost of borrowing money. APR is designed to represent the long-term cost of a loan, from closing day to the date it’s paid off. Rather than looking at interest rate alone, the APR on a mortgage includes lender charges and fees like:
Mortgage insurance
Discount points
Mortgage origination fees
Other closing costs
APR is calculated by finding the total cost of a mortgage loan’s upfront fees, then spreading them over the life of the loan to estimate the yearly cost. This is added to the interest rate to find the ‘real’ annual cost of financing. The APR indicates the true amount you will pay on top of the balance of the mortgage and helps borrowers compare loans. The higher the APR the more the loan costs.
Mortgage lenders are mandated by the Truth In Lending Act to disclose a home loan’s APR as well as the interest rate each time they provide a loan offer. The APR is helpful when comparing loans.
SC Housing is offering $12,000 in down payment assistance along with competitive interest rate loans for Palmetto Heroes! The program is offered to eligible service personnel who provide vital support to South Carolina communities, these include teachers, nurses, law enforcement officers, correctional officers, fire fighters, emergency medical technicians, paramedics, veterans, active-duty military, and National Guard members.
The initiative is available on a first-come, first-served basis starting April 15th and requires an executed sales contract on a home. Funds get exhausted quickly and could be gone in a few months. Get pre-approved now so you can start looking for a home and secure your funds!
Rates for the program will be quoted on Monday, April 15th.
Eligibility is determined by South Carolina State Housing Finance and Development Authority.
Real Estate Matters in Charleston SC - Gena Glaze 