Predictions and Projections for Mortgage Rates in the Coming Years

The landscape of the real estate market is intricately linked with the trajectory of mortgage rates. As we navigate the ever-changing economic environment, various institutions and experts have offered their projections for the path that mortgage rates might take in the near future. These forecasts provide valuable insights for potential homebuyers, sellers, and investors alike, enabling them to make informed decisions based on the anticipated changes in borrowing costs.

Interest Rate Prognostications

The Outcome

While each institution’s projections may differ slightly, a common thread emerges the anticipation of declining mortgage rates in the coming years. These forecasts provide valuable information for potential homebuyers and those involved in the real estate market, aiding them in making well-informed decisions based on the expected changes in borrowing costs. As economic conditions evolve, the accuracy of these predictions will become clearer, ultimately shaping the future landscape of the housing market.

How these factors contribute to the broader picture:

The decrease in interest rates is likely to be a welcomed development for both sellers and buyers. However, it’s important to note that these predictions don’t imply a complete return to historically low rates—those days seem to be behind us for the foreseeable future.

As interest rates decline and the affordability index increases, prospective buyers will find themselves with increased purchasing power. This surge in affordability will also contribute to a rise in the buyer sentiment index regarding home purchases. Currently, this index reflects that 82% of buyers consider it unfavorable to buy a home due to the combination of elevated interest rates and housing prices.

As the scenario changes and interest rates start to decrease, we anticipate a significant portion of the 82% of cautious buyers on the sidelines will reengage in the housing market. This renewed interest, combined with improved affordability and increased enthusiasm for homebuying, is likely to lead to a scenario where home values start to appreciate at a faster rate compared to the present.

Decision Time

As Warren Buffet famously stated“Be fearful when others are greedy, and greedy when others are fearful.”

The most prudent trajectory within the realm of our discerned understanding would be for prospective buyers to proactively pursue their aspirations of homeownership prior to the broader populace. Should the cacophony of experts’ prognostications hold true and the prevailing interest rates experience a decline, the avenue of refinancing at the diminished rate emerges as a viable choice, thereby securing a residential abode in advance of the burgeoning fervor among competitors. Conversely, in the event of errant forecasts, substantial savings would also be accrued by evading elevated interest rates.


MBA’s Anticipations

The Mortgage Bankers Association (MBA) has provided its outlook on mortgage rates, forecasting that the 30-year fixed mortgage rate will experience an average of 5.9% during the fourth quarter of 2023. Beyond this year, the MBA anticipates a gradual slide in mortgage rates, reaching an average of 4.9% by April 2024. This projection suggests a potential easing of borrowing costs, which could stimulate activity in the housing market.

Morningstar’s Insights

Economists at Morningstar, a renowned financial services firm, offer their own perspective on the path of mortgage rates. Their projections suggest that the average 30-year fixed mortgage rate will stand at 6.25% in 2023. Looking ahead, Morningstar envisions a decline to 5.0% in 2024, followed by a further decrease to 4.0% in 2025. These projections point towards a more gradual and sustained decline in borrowing rates over the next few years.

Goldman Sachs’ Analysis

The investment banking giant, Goldman Sachs, lends its voice to the discussion by estimating that the 30-year fixed mortgage rate will conclude 2023 at 6.4%. For the subsequent year, Goldman Sachs predicts an average mortgage rate of 5.9% in 2024. This projection suggests that while the rates may experience a slight decrease, they will remain above the historical lows seen in previous years.

NAR’s Outlook

The National Association of Realtors (NAR) brings its perspective to the table, forecasting a decline in mortgage rates as well. NAR’s economists project a dip to 6.4% by the end of 2023, followed by a further reduction to 6.0% in 2024. These predictions align with the overall trend of declining mortgage rates, potentially influencing buying decisions and overall market dynamics.

Morgan Stanley’s Perspective

Morgan Stanley, a prominent financial institution, projects that the 30-year fixed mortgage rate will initiate 2024 at 6.0%. This projection indicates a stabilization of rates at a level similar to those forecasted by other entities, further solidifying the notion of a gradual decline in borrowing costs.

Moody’s Analytics’ Insights

The financial intelligence arm of Moody’s, Moody’s Analytics, projects that the 30-year fixed mortgage rate will remain relatively high through much of 2023, with an average of 6.5%. While this forecast deviates from some others, it suggests a potential delay in the downward trajectory of rates before aligning with the broader trend.’s Perspective

Economists at, a prominent home listing site, hold the belief that the 30-year fixed mortgage rate will commence 2024 at 6.1%. Their projection hints at a continued decline in mortgage rates, although at a pace that may vary from other estimations.

Fannie Mae’s Expectations

Economists at Fannie Mae, a government-sponsored enterprise, provide their own outlook on mortgage rates. Fannie Mae anticipates an average of 6.6% for the 30-year fixed mortgage rate during the fourth quarter of 2023. Looking forward, Fannie Mae foresees a gradual reduction in rates to an average of 5.9% in the fourth quarter of 2024. Additionally, for the entire calendar year of 2024, Fannie Mae’s forecast suggests an average mortgage rate of 6.1%.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 30 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California.  They may be reached at (650) 508.1441 or emailed at

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The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Drew Morgan—Broker Associate 01124318 | Christine Morgan—Sales Associate 01174047

Co-Owners of Morganhomes, Inc. Licensed under RE/MAX Star Properties 01811140

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