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Mortgage Rate Trends In The Second Quarter 2024

April 22, 2024

Mortgage Trends

At the time this article was written, 30-year fixed-rate FHA mortgage rates were listed in the low 7% range. Some expected that position to be far more prevalent in the past than it actually is as we review mortgage rates in the second quarter of the year. 

Is there a chance of recovery in the coming months? Conditions aren’t clear, but the Fed’s future actions could determine the direction of things.

Recovery Prospects For The Housing Market May Be Tied To Future Fed Actions (Again)

Matthew Graham of Mortgage News Daily reports, “While (Fed Chair) Powell and the Fed repeat that the rate path depends on economic data, it’s no surprise to see recent comments acknowledging a surprising amount of strength in the recent data.”

Graham also says, “Stronger data means fewer rate cuts.  Powell went as far as saying there was new uncertainty as to whether the Fed will even be able to cut in 2024.”

That’s NOT the kind of financial optimism some buyers and sellers were feeling at the start of the year. Matthew Graham’s report notes what the New York Fed president said on the possibility of future rate hikes which could further complicate a housing market recovery.

“Two days later, NY Fed President John Williams struck a similar tone. Just last week, he had pushed back on the CPI data, saying the Fed wasn’t surprised by setbacks in the inflation data.”

“This week’s comments did more to acknowledge the other side of data dependency.  Specifically, Williams said the Fed could hike again if the data called for it.”

Future Rate Hikes May Be On The Table

The text above contains some (informed) speculation, but it is worth noting that the Fed has already demonstrated that rate hikes are possible when conditions are right.

And that’s not great news for those who wanted to wait out the mortgage rate issues of 2023 and early 2024. Will these future homeowners be rewarded with improving home loan rates on 30-year fixed-interest mortgages? Time will tell.

How To Move Forward With A Mortgage

Do you need housing now? Consider your options up to and including the FHA adjustable-rate mortgage.

If you add an ARM loan to your list to research, be sure to investigate how to make an exit strategy to deal with the end of the intro rate period and the FHA loan rate adjustments that occur after the introductory period.

If you want to add an FHA ARM loan to your list of home loan options, ask your loan officer which intro rate options are available to you, including the standard one-year FHA ARM loan all the way up to a 7—or even 10-year introductory rate. Your lender may or may not offer these, it is important to ask early. 

Another thing to think about? Applying for down payment assistance programs (these are offered in your local area) to reduce the out of pocket cost of buying a home.

It is also smart to budget for a bigger down payment to lower the principal balance before you start making house payments, making it less expensive over the entire mortgage.

Joe Wallace - Staff Writer

By Joe Wallace

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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