If you are priced out of the housing market in 2023, you may have better luck finding an affordable home in 2024.
Mortgage rates are expected to fall approximately 1% by the end of the year – from 6.6% to 5.75% – according to the latest housing forecasts. That's good news for buyers, as the decline would reduce monthly mortgage costs by about $200 for the median-priced home.
Assuming you make a 20% down payment on a Median home price is $431,000, the total monthly cost of the mortgage would decrease by as much as $190, according to CNBC's mortgage calculator. Here's a look at the estimated totals based on projected 30-year fixed interest rates:
- 6.6% (current rate): $2,202
- 6.1%: $2089
- 5.75%: $2,012
Over the course of the entire mortgage, that could amount to about $68,000 saved in interest.
Note that the totals are for the mortgage amount only and do not include additional expenses such as private mortgage insurance, home insurance, and property taxes.
While a lower mortgage rate should provide some cost relief for homebuyers, home prices are also expected to rise in 2024.
The National Association of Realtors expects a modest increase in home prices 0.9% in 2023Fannie Mae Projects 2.4% Business intelligence company CoreLogic expects a Annual profit 2.5%As of November 2024. However, it should be noted that house price growth can vary significantly by region.
Whether this is a good time to buy a home depends on your personal finances and where you want to live. While a 1% drop in mortgage rates may not provide sufficient cost relief on its own, the decline in home prices in some areas – Especially Florida – It can make a difference.
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