Will mortgage rates fall this spring? Here's what the experts think

Mortgage rates fell to low levels during the pandemic, dropping below 3% as real estate prices soared. But subsequent issues with inflation ultimately caused the Federal Reserve to raise its benchmark interest rate, which led consumer interest rates to climb over time. In turn, today's average 30-year mortgage rate is much higher than it was during the pandemic at 6.88% (as of April 1, 2024).

Meanwhile, home prices have continued to climb and issues with low inventory are still common in many markets. Against this backdrop, many prospective homebuyers are watching and waiting to see if mortgage rates fall, which could help make homebuying more affordable overall. But what do experts think could happen with mortgage rates this spring? Here's what you should know.

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Will mortgage rates fall this spring? Here's what the experts think.

Many experts expect that mortgage rates won't experience many, if any, drops this spring. Rather, experts expect that rate cuts could happen in the second half of the year instead. 

Why mortgage rates might not budge much this spring

While mortgage rates don't exactly depend on the Fed's rate decisions, the Fed does have a big influence on the direction they take. And until issues with persistent inflation show more signs of easing, mortgage rates might not drop much.

"While we're all eager for mortgage rates to head south this spring, I'm inclined to think it's unlikely, especially with the Federal Reserve maintaining its 'hold and observe' strategy for now," says Matt Dunbar, SVP of Southeast Region at Churchill Mortgage. "Despite their recent communications regarding future rate cuts, expecting a substantial drop in mortgage rates in the short term might be overly optimistic."

That said, mortgage rates could start to fall toward the end of the spring, given the Fed's meeting schedule.

"I don't expect mortgage rates to fall until around the June 12th Fed meeting. The Fed isn't expected to cut rates during their May meeting, which means any real drop in interest rates would not happen until late spring/early summer at the earliest," says Will Matheson, co-founder and managing partner at Matheson Capital.

Even then, the initial Fed rate cut is expected to be 25 basis points, so that might not have a dramatic effect on mortgage interest rates.

"I expect rates to start falling during the second half of this year, when the Fed is projected to start cutting rates. By the end of the year, I expect mortgage rates to be down by 0.75-1.00 percentage points," says Matheson.

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Expect ebbs and flows

Although the Fed isn't expected to cut rates until at least June, mortgage rates could fluctuate up or down before then, based on the available data. However, buyers might not want to draw too many conclusions from these fluctuations.

"I don't think mortgage rates are going to fall significantly this spring. Sure, we've seen some rates fall over the past few days, but mortgage rates tend to ebb and flow, and I don't think we're at a steady decline yet," says Seamus Nally, CEO of TurboTenant.

"All signs point to rates dropping by the end of the year though, likely somewhere around 6%. Everyone is expecting the Federal Reserve to cut the benchmark interest rate in the latter half of the year, and once that happens, that is when I expect mortgage rates to start making a solid decline," he adds.

Keep an eye on the data

While small fluctuations in mortgage rates might not indicate much, the mortgage market could get a head start before the Fed cuts interest rates. However, that depends on what data comes in.

"Based on incoming economic and CPI data, we could see some easing into the mid-to-low sixes, though surprises in data could potentially nudge rates in the opposite direction," says Dunbar.

After the spring season ends, what happens with mortgage rates will again depend on how the economy's doing and how the Fed interprets economic data. 

"In the future, whether rates might drop depends largely on how the Federal Reserve perceives the economy's progress toward its inflation and growth targets," says Dunbar. 

The bottom line

Overall, expert mortgage rate predictions typically don't expect there to be much of a reduction in mortgage rates this spring, but perhaps a larger drop will happen later this year. But it's worth noting that because much remains uncertain, it's tough to get the market timing right. In turn, homebuyers might want to focus on getting the best deal on a home that fits their needs rather than trying to time the mortgage market. And if you do decide to buy a home now, there may be ways to get a lower mortgage rate, such as improving your credit score, putting down a larger down payment or getting seller concessions.