SAN DIEGO — Many throughout the United States are wondering if 2024 is a good time to buy a new house as mortgage rates continue to fall for the ninth week in a row.
CBS 8 is Working for You to find out what this drop in rates means for prospective homebuyers.
Will 2024 be a better time to buy a house?
Rates in 2023 were nearly eight percent, some of the highest mortgage rates the market had seen in years.
But they have since gone down. Rates are under seven percent, the lowest level since May of last year.
"I think the outlook looks good as far as interest rates are concerned,” said Alan Gin, an economics professor at the University of San Diego.
Gin says the Federal Reserve started raising interest rates to combat inflation.
How much will mortgage rates drop in 2024?
As the economy improved, those rates dropped and they're expected to be cut even further.
"I think we'll probably see at least a half percentage drop in the rate the Federal Reserve is targeting and that will translate into lower (mortgage) rates as well," said Gin.
That half percentage could equate to a savings of hundreds of dollars a month.
Should I buy a house now or wait?
Sam Hansen, a branch manager with the Gaylord-Hansen team at Cross Country Mortgage, says buy now — if you can.
“My advice is, if you can qualify right now for this payment, get into that home before those prices continue to rise. Because if you wait, you're going to be battling more buyers, and then you're going to be paying a higher price,” said Hansen.
Hansen says when rates go down, more people qualify to buy a home.
And since supply is still incredibly low, that extra competition will drive home prices up.
"When you have that type of supply-demand imbalance and people are battling to get into these homes, naturally prices are going to continue to rise,: he said.
Hansen does not foresee housing prices dropping, but says home buyers always have the option to refinance, once rates do.
Professor Gin offered the same advice, all while acknowledging the fact San Diego is one of the most expensive places to live in the country.
"The problem with San Diego is the prices are still pretty high. Even though the interest rates went up, that did not put a dent in the rise in prices we've seen," said Gin.
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