The State of Mortgage Rates in Q2 2024
April 26, 2024
At the time of this writing, 30-year fixed-rate FHA mortgage rates were listed in the low 7% range, a place many hoped would be in the rearview mirror by now, the second quarter of the year. What do respected market watchers say about the current state of the housing market regarding mortgage rates?
Home Loan Interest Rate Recovery Prospects
Matthew Graham of Mortgage News Daily writes, “While (Fed Chair) Powell and the Fed repeat that the rate path depends on economic data, it's no surprise to see recent comments acknowledging a surprising amount of strength in the recent data.”
Graham adds, “Stronger data means fewer rate cuts. Powell went as far as saying there was new uncertainty as to whether the Fed will even be able to cut in 2024.”
That’s a far cry from the optimism expressed by many (not necessarily the Fed) at the start of the year. Matthew Graham's report notes what the New York Fed president said on the subject.
“Two days later, NY Fed President John Williams struck a similar tone. Just last week, he had pushed back on the CPI data, saying the Fed wasn't surprised by setbacks in the inflation data.”
“This week's comments did more to acknowledge the other side of data dependency. Specifically, Williams said the Fed could hike again if the data called for it.”
Future Rate Hikes?
To be sure, what’s mentioned above is speculative (at press time) but there’s no reason to doubt these assertions. The Fed has already demonstrated that a rate hike may be coming if conditions are right.
And that’s discouraging to borrowers who tried to wait out the mortgage rate environment. Will they be rewarded with consistently sub-7% home loan rates on 30-year fixed-interest mortgages?
That remains to be seen, but in the meantime, plenty of potential house hunters are wondering what to do next. Are you one of them?
How to Proceed
Those who need housing now should consider options such as an FHA adjustable-rate mortgage. That said, don’t consider such a loan without formulating an exit strategy to deal with the first and subsequent rate adjustments once your interest rate changes begin after the introductory period.
If you consider an FHA ARM loan, ask the lender which options are available to you for that intro period. There are one-year ARM loans, but some intro rates can last up to 10 years. Much depends on what the lender is willing to offer.
Another thing to do is to explore down payment assistance programs in your local area to offset the upfront cost of buying a home. You should also consider making a larger down payment to reduce the principal balance of the loan, making it cheaper over the full term of the mortgage.
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Home Loan Interest Rate Recovery Prospects
Matthew Graham of Mortgage News Daily writes, “While (Fed Chair) Powell and the Fed repeat that the rate path depends on economic data, it's no surprise to see recent comments acknowledging a surprising amount of strength in the recent data.”
Graham adds, “Stronger data means fewer rate cuts. Powell went as far as saying there was new uncertainty as to whether the Fed will even be able to cut in 2024.”
That’s a far cry from the optimism expressed by many (not necessarily the Fed) at the start of the year. Matthew Graham's report notes what the New York Fed president said on the subject.
“Two days later, NY Fed President John Williams struck a similar tone. Just last week, he had pushed back on the CPI data, saying the Fed wasn't surprised by setbacks in the inflation data.”
“This week's comments did more to acknowledge the other side of data dependency. Specifically, Williams said the Fed could hike again if the data called for it.”
Future Rate Hikes?
To be sure, what’s mentioned above is speculative (at press time) but there’s no reason to doubt these assertions. The Fed has already demonstrated that a rate hike may be coming if conditions are right.
And that’s discouraging to borrowers who tried to wait out the mortgage rate environment. Will they be rewarded with consistently sub-7% home loan rates on 30-year fixed-interest mortgages?
That remains to be seen, but in the meantime, plenty of potential house hunters are wondering what to do next. Are you one of them?
How to Proceed
Those who need housing now should consider options such as an FHA adjustable-rate mortgage. That said, don’t consider such a loan without formulating an exit strategy to deal with the first and subsequent rate adjustments once your interest rate changes begin after the introductory period.
If you consider an FHA ARM loan, ask the lender which options are available to you for that intro period. There are one-year ARM loans, but some intro rates can last up to 10 years. Much depends on what the lender is willing to offer.
Another thing to do is to explore down payment assistance programs in your local area to offset the upfront cost of buying a home. You should also consider making a larger down payment to reduce the principal balance of the loan, making it cheaper over the full term of the mortgage.
------------------------------
RELATED VIDEOS:
There's a Difference Between APR and Interest Rates
Choose Your Mortgage Lender Carefully
Getting Started With Your FHA Loan Application
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