Thursday, Mar 28, 2024
By: Ralph dibugnara
By: Paul Centopani
February 29, 2024
Mortgage rate forecast for next week (March 4-8)
Mortgage rates reached a two-month high, growing for the fourth straight week.
The average 30-year fixed rate mortgage (FRM) increased from 6.9% on Feb. 22 to 6.94% on Feb. 29, according to Freddie Mac.
“The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for home buying,” said Sam Khater, Freddie Mac’s chief economist. “While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines.”
Will mortgage rates go down in March?
Mortgage rates fluctuated significantly in 2023, with the average 30-year fixed rate going as low as 6.09% on Feb. 2 and as high as 7.79% on Oct. 26, according to Freddie Mac.
Find your lowest mortgage rate. Start here (Feb 29th, 2024)
The range can be largely attributed to the Federal Reserve’s ongoing fight against inflation, juxtaposed with uncertainty in the banking sector sparked by Silicon Valley Bank’s collapse. However, with duress permeating the financial market and the fallout from U.S. debt ceiling talks, the Fed may continue making hikes to bring interest rates down.
With the economy possibly heading into a recession, we may have already seen the peak of this rate cycle. Of course, interest rates are notoriously volatile and could tick back up on any given week.
Experts from CoreLogic, Home Qualified, Realtor.com and others weigh in on whether 30-year mortgage rates will climb, fall, or level off in March.
Expert mortgage rate predictions for March
Craig Berry, branch manager at Acopia Home Loans
Prediction: Rates will moderate
“In their Jan. 31 meeting, the Fed opted to leave rates alone. According to the Federal Reserve, inflation is coming down faster than expected due to “a robust economy”. Even so, the Fed indicated they’ll need to see additional indicators that inflation has stabilized prior to making any rate cuts. This news didn’t help mortgage rates. Other than slight fluctuations, rates will remain relatively flat through the month of March.”
Molly Boesel, principal economist at CoreLogic
Prediction: Rates will moderate
“The Federal Reserve has taken a pause on interest rates as they monitor inflation, and those looking for decreases in rates will need to be patient. When inflation approaches the Fed target, rates should start to decrease. Until then, look for the 30-year mortgage rate to be in the high-6% range in March.”
Ralph DiBugnara, president at Home Qualified
Prediction: Rates will rise
“So far, the first quarter of 2024 has been very similar to the first quarter of 2023. Inflation has been up in some categories and made rates move more upward than downward. Rates came down at the end of 2023 but the most recent Fed meeting should sign that there won’t be any rate cuts until summer 2024. I believe that lack of commitment to cut or raise by the Fed will keep the market guessing and we will see averages creep up some. The 30-year fixed rate will average 7.25% in March while the 15-year fixed will average 6.75%.”
Selma Hepp, chief economist at CoreLogic
Prediction: Rates will moderate
“The US economy continues to show signs of strength, so therefore, rates are likely to remain stable through the spring home buying season, with cuts not expected until the beginning of summer. However, in recent industry surveys, home buyers are beginning to feel optimistic about where rates are heading and more and more home buyers are anticipating rates to decline through the year.”
Hannah Jones, senior economic research analyst at Realtor.com
Prediction: Rates will moderate
“Mortgage rates are likely to remain steady through March, dependent on incoming economic data. At the February FOMC meeting, Chair Powell emphasized that it is unlikely that we will see a rate cut in March as incoming economic data remains fairly strong. Later the same week, January employment data came in well above expectation with the economy adding 353,000 net new jobs in the month. The still-strong employment data demonstrated that slowing the economy may not be a straight path, and prolonged contractionary policy may be necessary. Mortgage rates are likely to remain in the mid to high 6% for the time being until slowing inflation shifts investor expectations and the Fed starts to cut interest rates.”
Jess Kennedy, COO at Beeline
Prediction: Rates will moderate
“We predict that rates will hold relatively steady in March. The Fed has signaled pretty strongly that they are in a holding pattern right now. We may see slight fluctuations but generally, we don’t expect much movement. The 10-year bond and 30-year mortgage rate spread continues to be pretty large and we don’t anticipate that to change any time soon since the Federal Reserve is no longer buying MBS, so the demand for MBS is lower.”
Odeta Kushi, deputy chief economist at First American
Prediction: Rates will moderate
“The average 30-year fixed mortgage rate has fallen in recent months, but ticked up again recently due to strong economic and labor market data. Initial optimism for Federal Reserve rate cuts was tempered after recent data, prompting the increase in mortgage rates. Traders have now ruled out a March rate cut, yet May could still see a reduction. This suggests potential mortgage rate volatility ahead, dependent on future economic data. Should this economic data exceed expectations, rates may rise further. Nonetheless, ongoing deceleration in inflation fuels cautious optimism for a general decline in mortgage rates in 2024, especially in the latter half of the year.”
Rick Sharga, CEO at CJ Patrick Company
Prediction: Rates will moderate
“The consensus is that the Federal Reserve will hold steady at its March meeting, neither raising nor cutting the Fed Funds Rate. Mortgage rates on 30-year fixed rate loans in March will likely do the same, neither rising or declining very much, staying in a fairly narrow band between 6.5-7.0%, fluctuating with reports on various economic metrics.
The sudden dip in rates in the month of January appears to have been an overreaction by the market to language from the Fed that was interpreted as a sign of rate cuts as early as the first quarter. With that increasingly unlikely to happen, we’ve seen mortgage rates inch back up, and are likely to see them zig zag in a gradually downward direction for the rest of the year, but not drop meaningfully until the first rate cut by the Fed actually happens.”
Charles Williams, CEO at Percy
Prediction: Rates will moderate
“In a recent interview on 60 Minutes, Fed Chair Jerome Powell gave a strong indication that they won’t be cutting rates before the economy hits the target rates of 2%. With jobs numbers still very strong, it’s not likely we’ll see a rate cut until March, perhaps even May. And even then, it will be a slow and gradual pullback, so we’ll be lucky to dip below 6% mortgage rates by the end of the year.”
let us connect you to
investors in real estate
Looking to build a home, buy a fixer upper
& repair or invest in a real estate project long term?
We can connect you to experts who have loan products.