What's Going on with Mortgage Rates?

In October, mortgage rates started with an 8. Today, we have rates that start with a 5. Across the board, mortgage rates have dropped over 1.50% in less than 2 months. This is the lowest rates have been since May. This is all positive news pointing to a really active 2024. Buyers who have been on sitting on the sidelines will now hear rates are dropping and many will act on it.

We know this is confusing because many people looking at a real estate move believe the mortgage rate is the Fed Funds rate. Mortgage rates follow the 10 Year Treasury more than anything else. The drastic drop in the 10-Year Treasury has created the drastic drop in mortgage rates.

Don’t be misled by headlines and think you need to wait for the Fed to drop rates later next year before buying. The reality is, the Fed Funds rate is not the mortgage rate and does not have a direct impact. While it helps to guide direction, the markets react months before the Fed does anything based on speculation. That’s how markets work. The most likely outcome is that the Fed does exactly what investors are assuming. If that happens, there will be very little movement in mortgage rates when the Fed drops their rate.

The bottom line is if you are waiting for the Fed, you will be late to the game. If you are thinking about a move in 2024, NOW is the time to make a plan, starting with any questions you have about mortgage rates and where the market is headed. Reach out - we’d love to help!

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