Are these the lowest mortgage rates we’ll see in 2024?
Have we seen the bottom in mortgage rates for 2024 after a crazy roller coaster ride so far this year? My 2024 forecast had a mortgage rate range of 7.25%-5.75%. To get to the lower end of this range, we needed to see two things: the labor market getting softer and the mortgage spreads improving. This is the double-whammy impact, and that’s what has happened.
However, it’s still September, and we have three months to go! Can my lowest range forecast be wrong? Yes, here’s how and why.
10-year yield and mortgage rates
My 2024 forecast included:
A range for mortgage rates between 7.25%-5.75%
A range for the 10-year yield between 4.25%-3.21%
How rates get to the lower-end range of the forecast is critical. There are two variables: the labor data getting softer is the prime one and the second one is the spreads getting better. Again, the double whammy of lower yields and spreads. This is not about more Fed rate cuts, because the market has priced in a lot Fed rate cuts already, but they haven’t priced in a recession yet. People wonder why rates went up after the bigger than expected Fed rate cut, as shown in the chart below. I talked about this in this HousingWire Daily podcast.
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