May 2024 sees mortgage rates predicted to stabilize around 7%, influenced by ongoing high inflation and Federal Reserve policies aimed at curbing it. High borrowing costs are deterring potential buyers, who are waiting for a decrease in rates before purchasing homes.
High May 2024 Mortgage Rates Discourage Buyers
The Federal Reserve’s measures to combat inflation by maintaining a base interest rate between 5.25% and 5.5% have escalated home loan costs. With inflation still above the targeted 2%, rates are unlikely to drop soon. This situation is mirrored in the recent climb to a 7.24% mortgage rate, marking a peak since November 2023.
Impact of Economic Indicators
Economic data, particularly concerning inflation, is critical. May’s consumer price index and labor market figures will heavily influence mortgage rates. Experts foresee rates remaining between 7% and 7.5% unless inflation notably decreases.
Market Trends and Buyer Sentiment
Despite high rates, certain buyers must proceed with purchases due to personal circumstances. However, general buyer caution is slowing down home sales, potentially increasing available inventory and moderating price hikes this summer.
May 2024 is a crucial month for mortgage rates, dependent largely on forthcoming economic reports. While some are forced to buy, overall, high rates are cooling the market, with potential slight declines later in the year.
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