The Laugesen Team, specialists in the Bay Area’s Peninsula real estate market, is keenly observing the developments in mortgage rates as we enter 2024. The Federal Open Market Committee’s recent decision to maintain the benchmark federal funds rate steady for the third consecutive time at the end of 2023 is a pivotal development. This decision, leaving the rate between 5.25% and 5.5%, signals a potential pause in rate hikes, as noted by Fed Chairman Jerome Powell. Despite inflation still being above the Fed’s 2% target, the projections for 2024 suggest possible rate cuts by year’s end.
Experts are offering varied perspectives on the trajectory of mortgage rates for 2024. Danielle Hale from Realtor.com and other industry analysts like those from the National Association of Realtors and the Mortgage Bankers Association predict a gradual decrease in rates. They foresee mortgage rates potentially easing to near 6.5% by the end of the year, providing some relief to homebuyers. The current rates as of January 2024, with a 30-year fixed mortgage at 7.12% and a 15-year fixed-rate at 6.55%, are significantly higher than those in early 2022, indicating a shift in the lending landscape.
For the real estate market in the Peninsula, encompassing Redwood City, Hillsborough, San Mateo, and Burlingame, this could mean a slight easing of mortgage costs as the year progresses. Homebuyers might find more affordable options, and homeowners considering refinancing could see opportunities, especially if rates continue to drop. However, the decision to refinance should not only consider potential rate decreases but also the overall cost implications over the loan’s lifetime.
In the broader context, the Peninsula’s real estate market is likely to experience a balancing act. While slightly easing rates might not drastically alter market dynamics in the short term, they could provide a more favorable environment for buyers as the year progresses. Looking ahead, experts suggest that mortgage rates are likely to decline over the next few years, potentially leading to a more active housing market. Yet, the challenge of low housing inventory remains, likely keeping the market competitive.
As we navigate through 2024, the Laugesen Team remains committed to providing our clients with the most current insights and guidance. Whether you’re buying, selling, or considering refinancing in the dynamic Peninsula market, we are here to help you make informed decisions in this evolving landscape.
Please don’t hesitate to contact us with any questions. We love what we do and we are here to assist you in achieving your real estate goals in 2024