Mortgage Rates Could Fall to 5.8% by Year's End: Serhant Agent

As the housing market continues to evolve, real estate experts are keeping a close eye on mortgage rates, which could see a significant drop by the end of the year. According to a prominent agent from SERHANT., mortgage rates could fall to as low as 5.8% by December 2024. This projection is based on various factors, including the Federal Reserve's rate cuts, market anticipation, and improving economic conditions.



The Federal Reserve's recent half-percentage point cut in interest rates is expected to have a positive impact on mortgage rates. This cut, along with the market's anticipation of further rate reductions, has already contributed to a decline in long-term fixed-rate mortgage rates. As of late August 2024, these rates stood at 6.2%, the lowest since February 2023. This trend suggests that mortgage rates are likely to decrease further by the end of the year.

Lower mortgage rates could have a significant impact on housing affordability. As rates decrease, monthly payments for buyers become more manageable, making homes more affordable. However, this affordability gain may also lead to increased competition among buyers, as more people enter the market. This could potentially drive up home prices, but it could also encourage more homebuilding, which would increase the supply of housing units and potentially ease prices.

Despite the potential benefits of lower mortgage rates, the current housing market is experiencing a unique situation where falling rates have not resulted in a significant surge in home sales. This can be attributed to various uncertainties, such as the ongoing National Association of Realtors (NAR) settlement and the upcoming presidential election. Buyers are hesitant to enter the market due to these uncertainties, despite the affordability gains.

In conclusion, the projected decrease in mortgage rates by year's end could have a significant impact on the housing market. While lower rates could make homes more affordable and potentially increase home sales, the current market uncertainties may dampen the expected surge in activity. As the market continues to evolve, real estate experts will closely monitor mortgage rates and their impact on housing affordability and sales.