After touching multi-decade highs of 8% at the end of October 2023, 30-year mortgage rates improved for 8 straight weeks, helping them decline to 6.67%, as published by Freddie Mac to finish 2023. What caused the rate improvement? There are quite a few contributing factors. Inflation is declining, the anticipation that the Federal Reserve has finished hiking rates, the labor market is loosening, oil prices have been on a sharp decline, and continued recession fears along with uncertainty in the Middle East.
What's next? We could see a Fed rate cut as soon as April. History has shown that the first rate cut comes about 8 1/2 months after the last hike; setting the stage for an April cut. As of this writing, there is a 70% chance the Fed will cut rates at the March meeting.

Bottom line: No one knows what rates are going to do and 2024 is going to start with similar rates to 2023...but this time around, the Fed's next move is likely a cut and the economy continues to show slowing signs, which hopefully leads to a continued decline in rates. This would go a long way to increasing home purchase activity this year.

Source: Mortgage Market Guide