Lower mortgage rates next year unlikely to entice 'rate-locked' homeowners to sell, economists say
Even if mortgage rates ease moderately next year, as some forecasters predict, the average rate on a 30-year home loan could remain above 6%
LOS ANGELES (AP) — Several housing economists are projecting that mortgage rates will ease moderately next year, though the forecasts call for the average rate on a 30-year home loan to remain above 6%.
While lower rates could help bring more buyers off the sidelines, the projected declines are unlikely to encourage homeowners who locked in rock-bottom rates two years ago to sell. That sets the stage for the housing market to remain constrained by a low supply of homes on the market, even if rates decline, economists say.
“The costs are going to remain high and we’re going to see a lot of people just choose to sit out,” said Danielle Hale, chief economist at Realtor.com.
Hale's forecast calls for the rate on a 30-year mortgage to average 6.8% in 2024, then slip down to 6.5% by the end of the year. At First American Financial, chief economist Mark Fleming predicts the average rate will range between 6.5% and 7.5%.
