Home » 2024 Housing Forecast: Navigating Fed Rate Cuts

2024 Housing Forecast: Navigating Fed Rate Cuts

Though no one can predict what the Fed will do with absolute certainty, the consensus from Wall Street banks is between two and five interest rate cuts in 2024. While Fed cuts do not directly reduce mortgage rates, the cuts do send a signal to the markets that the Fed sees inflation moderating. Expectations about inflation and the path of rates are a significant drivers of long-term rates (including 30-year mortgage rates.)

We believe that the current rate environment has delayed, not eliminated, a large amount of demand for housing. One data point we keep a close eye on is how changing mortgage rates affect mortgage applications. As you can see in the chart below, three times since November 2022, we have seen a moderate drop in mortgage rates, leading to an uptick in mortgage applications to buy homes. When we see an expected drop in mortgage rates this year, we will pay close attention to how it affects mortgage demand.


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