will mortgage rates drop in 2024?

Wondering if mortgage rates will go down in 2024? It’s a tough call because so many factors come into play, like the economy, central bank policies, and global events. While we can’t give you a definitive answer, let me break down what could influence mortgage rates next year.

Economic Conditions

Inflation Rates

Central banks, like the Bank of England, keep a close eye on inflation. If inflation drops, there’s less need to keep interest rates high, which could mean lower mortgage rates.

Economic Growth

When the economy is booming, mortgage rates can rise due to higher loan demand. Conversely if the economy slows down, rates might drop to encourage more borrowing.

Employment Rates

High employment typically means increased spending and borrowing, which can push rates up. If employment dips, rates might be lowered to boost the economy.

Central Bank Policies

Bank of England Base Rate

This base rate can influence mortgage rates. If the base rate is reduced or increased mortgage rates can follow.

Monetary Policy

The Bank of England’s strategies, like quantitative easing, influence credit availability and mortgage rates. Policies aimed at increasing liquidity might lower rates, while those aimed at reducing liquidity could increase rates.

Global Events

Geopolitical Stability

Geopolitical events can cause economic uncertainty, impacting interest rates globally. Stability tends to lead to lower rates, while instability can cause rates to rise as lenders price in higher risks

Global Financial Markets

The performance of global financial markets, including bond yields, can affect mortgage rates. Falling bond yields might lead to lower mortgage rates as lenders seek to remain competitive. Predicting whether mortgage rates will drop in 2024 isn’t straightforward, but keeping an eye on economic conditions, central bank policies, and global events can help you gauge trends.