Mortgage rate forecast November 2024

Mortgage rate predictions November 2024

The recent interval of lower mortgage rates ended almost as quickly as it arrived.

The average 30-year mortgage rate began declining from 7 percent in mid-July, fell to as low as 6.2 percent in September, then quickly reversed course, tracking back to 6.88 percent as of Oct. 30, according to Bankrate’s weekly lender survey.

In November, rates could continue to stay elevated, says Greg McBride, CFA, Bankrate’s chief financial analyst.

“Economic data have continued to come in hotter than expected, inflation is declining but slowly and unevenly, and concerns have increased about ever-escalating government borrowing,” McBride says. “None of that is suggestive of rates coming down in the near term. Essentially, something has to go wrong — economically, geopolitically, or in the functioning of markets — for mortgage rates to retreat in a material way before year-end.”

The Federal Reserve cut its benchmark rate in September — the first reduction since the pandemic — and it’s expected to issue another cut in November. While the central bank doesn’t directly set mortgage prices, it does influence them.

Will mortgage interest rates go down again?

Was the September dip just a head fake? With indicators such as hiring and economic growth showing signs of strength, Fannie Mae predicts 30-year rates will decrease to 6 percent by the end of the year, while the Mortgage Bankers Association calls for 6.3 percent.

“We’re not expecting rates to drop too much further from where they are today,” says Mike Fratantoni, chief economist at the Mortgage Bankers Association.

Current mortgage rate trends

Higher mortgage rates have kept homeowners locked in to lower-cost loans. Meanwhile, the median home price surged to $404,500 in September, the highest number for that month on record, according to the National Association of Realtors.

What to do if you’re getting a mortgage now

• Improve your credit score. A lower credit score won’t prevent you from getting a loan, but it can make all the difference between getting the lowest possible rate and more costly borrowing terms. The best mortgage rates go to borrowers with the highest credit scores, usually at least 780.
• Save up for a down payment. Putting more money down upfront can help you obtain a lower mortgage rate, and if you have 20 percent, you’ll avoid mortgage insurance, which adds costs to your loan. If you’re a first-time homebuyer and can’t cover a 20 percent down payment, there are loans, grants and programs that can help. The eligibility requirements vary by program, but are often based on factors like your income.
• Understand your debt-to-income ratio. Your debt-to-income (DTI) ratio compares how much money you owe to how much money you make, specifically your total monthly debt payments against your gross monthly income. Not sure how to figure out your DTI ratio? Bankrate has a calculator for that.

FAQ

• How are mortgage rates determined?

  It might seem like a bank or lender are dictating mortgage terms, but in fact, mortgage rates are not directly set by any one entity. Instead, mortgage rates grow out of a complicated mix of economic factors. Lenders typically set their rates based on the return they need to make a profit after accounting for risks and costs.
  
  The Federal Reserve doesn’t directly set mortgage rates, but it does set the overall tone. The closest proxy for mortgage rates is the 10-year Treasury yield. Historically, the typical 30-year mortgage rate was about 2 percentage points higher than the 10-year Treasury yield. That “spread” has been closer to 3 percentage points as of late.

• When should I refinance my mortgage?

  Deciding when to refinance is based on many factors. If rates have fallen since you originally took out your mortgage, refinancing might make sense. A refi can also be a good idea if you’ve improved your credit score and could lock in a lower rate or lower fees. A cash-out refinance can accomplish that as well, plus give you the funds to pay for a home renovation or other expenses.