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# Mortgage Rates Are Falling: Should You Buy Now or Wait for 2024?
- URL: https://www.mortgagemomradio.com/mortgage-rates-are-falling-should-you-buy-now-or-wait-for-2024/
- Published: 2023-12-06T21:00:00.000Z
- Updated: 2026-09-04T17:11:30.000Z
- Description: Five straight weeks of falling rates, a same-day conventional quote back under 7%, and 85% of first-time buyers still on the sidelines. Debbie makes the case for getting ahead of the herd, answers a round of HELOC questions, and previews Fannie Mae's new 5% down program for 2-4 units.
- Author: Deborah Marcoux
- Tags: Podcast, Mortgage Mom Radio, #episode-backfill

Mortgage Mom Radio • “Interest Rates Are Falling!” • Live show from Wednesday, December 6, 2023 • 48 minutes • Hosted by Debbie Marcoux, NMLS #237926

After 20 straight months of climbing, mortgage rates fell for five consecutive weeks heading into December 2023 — and Debbie ran fresh pricing the day of this show to prove it: a conventional quote back under 7% for the first time in months. With 85% of first-time buyers saying they'd put their plans on hold, she makes the case for getting ahead of the herd before rate cuts bring the competition back, answers a rapid-fire round of HELOC and home-equity questions, and previews Fannie Mae's new 5% down program for 2–4 unit homes.

## Key takeaways

- **The turn was real:** after the Fed's 20 months of hikes and two straight meetings of pauses, the Freddie Mac 30-year average fell for a fifth consecutive week to 7.22% — down from the October high around 7.75% — and Debbie's own same-day pricing showed a conventional quote at 6.875% with about a point.
- **85% of first-time buyers put their goal on hold.** Purchase applications rose for a fifth straight week as rates fell — Debbie's warning: get out ahead of that herd before everyone comes off the sidelines chasing the same short inventory.
- **Nobody credible was forecasting 3% again.** The expert consensus Debbie tracks pointed to rates eventually settling in the high 4s to low 5s — and the sub-3% owners who will never sell are exactly what kept inventory low and home values appreciating even at 7%+ rates.
- **Second mortgages price higher than firsts** — HELOCs and home equity loans were averaging around 10% (some under, some 13–14%) depending on credit, equity, occupancy, and property type. The blended-rate math is what decides between keeping a 3% first with a 10% second versus a full refinance.
- **A zero-balance HELOC helps your credit,** not hurts it — open availability with nothing owed lowers your debt ratio. But interest-only lines are a treadmill for debt consolidation; a fixed principal-and-interest home equity loan pays the balance down.
- **New for buyers of 2–4 unit homes:** Fannie Mae's just-released 5% down owner-occupied program (previously 15% for a duplex, 25% for 3–4 units), plus annual conventional and FHA loan-limit increases — in high-cost areas like LA County, FHA's 3.5% down now reaches loan amounts well over $1 million.
- **Buy what you can afford today** — the market is almost impossible to time; the best time is when you find a home that meets your family's needs at a payment you can carry, then refinance when rates drop.

## Chapters

- 01:00Twenty months of hikes, two pauses, five weeks of relief
- 03:0085% of first-time buyers are on hold — that's the opportunity
- 08:00Q&A: refinancing an investment property bought with hard money
- 10:00Q&A: HELOC rates vs. first-mortgage rates, and the blended-rate math
- 13:00Q&A: what a HELOC really costs, even with great credit
- 16:00The Forbes piece: when will home prices be affordable again?
- 18:00Freddie Mac at 7.22% — fifth straight weekly decline
- 19:00Debbie's same-day rate check: conventional back under 7%
- 21:00Q&A: does a zero-balance HELOC hurt your credit?
- 23:00Q&A: interest-only — flipper's tool or debt treadmill?
- 26:00Q&A: a HELOC and a home equity loan on the same house?
- 31:00Purchase applications up five weeks running — beat the herd
- 32:00Q&A: will we ever see 3% rates again?
- 36:00Fannie Mae's new 5% down for 2–4 units; loan limits rise
- 40:00Q&A: borrowing more than you need “just in case”
- 42:00Q&A: is being house poor always a mistake?

## Questions answered on this show

### “I bought a single-family investment house with a hard money loan. How do I refinance it?”

Get that refinanced — a hard money loan is probably sitting around the 10% range, and a normal investment-property refinance can definitely beat it. Know your current rate and balance, and know your property type: a one-unit house or condo prices differently from a 2–4 unit, and that drives the rate you can get. And since the best rates go to the highest credit scores, keep card balances low now so your score is at its peak when it's time to lock.

### “Is the rate on a home equity line higher or lower than a mortgage rate?”

Higher. HELOCs and home equity loans are both second mortgages, and seconds always carry higher rates than a new first mortgage. But that's exactly why they can still be the right tool: if you're sitting on a $500,000 first at 3% and need $100,000, blending 3% on $500,000 with even 10% on $100,000 beats refinancing the whole balance at today's first-mortgage rates. Flip the proportions — a $500,000 first but you need $400,000 — and a full refinance likely wins, because the first-mortgage rate is lower than any second's.

### “With great credit, what are the rates for equity lines?”

On average, around 10% — some under, some as high as 13–14%. Credit score is only one input: how much equity remains matters enormously (borrowing $100,000 against a home worth $1 million with $500,000 owed prices far better than borrowing to 90% of value), along with occupancy (primary, second home, investment) and property type (1–4 units).

### “Does a home equity line of credit look negative to creditors even if the balance is zero?”

No — the opposite. A HELOC behaves like a credit card on your report: a $50,000 or $100,000 line with nothing owed keeps your debt ratio (owed versus available) low, which actually improves your score. If you draw on it, you'll owe an interest-only minimum payment on the balance, but an untouched line costs nothing and helps.

### “If it's an interest-only payment, then it's no good… is it?”

It depends on who you are and what the money is for. Using a line for a quick flip — buy the fixer for cash, renovate, sell, pay the line off, repeat — interest-only is exactly the right tool. Using all $50,000 of a line for debt consolidation with no means to pay it back quickly puts you on the same treadmill as your credit card, since the minimum payment never touches principal — there, a fixed-rate home equity *loan* with a principal-and-interest payment is the better fit. Same caution on interest-only first mortgages: plan to move in three years, life happens, you're still there at year seven when the fixed period ends, and the payment nearly doubles.

### “Can I have both a home equity loan and a line of credit on the same house if it has enough equity?”

Possible, but hard. Both are second mortgages, and holding one of each puts a lender into *third* position behind your first and second. In a foreclosure, the first gets paid before the second and the second before the third — and the deeper the position, the likelier a lender recovers little or nothing. That risk is why seconds price above firsts, thirds price above seconds, and why most lenders simply won't write third position at all. Some will; they're just difficult to find.

### “What's the likelihood of interest rates ever dropping back to 3% or under?”

Barring another pandemic-scale shock, Debbie doesn't expect sub-3% again in our lifetimes — those rates existed because the Fed went to the floor in an emergency. What most experts she follows were anticipating instead: an eventual settle into the very high 4s to low 5s as the average mortgage rate. That's the planning number to use for a future payment. And the people who did lock 2.99% in 2021? They're never letting those homes go — which is precisely what kept inventory low, values appreciating, and this high-rate market from turning into a housing bust.

### “Is it wise to get a larger loan than I need, just in case — and pay it off sooner with the unused money?”

It depends entirely on what the money is for — IRS debt, monthly debts, or a renovation — and how fast you can pay it back; that conversation decides loan versus line and the right size. One rule Debbie gives everyone on renovation money: take the contractor's bid and add 20%. The moment walls open, or the freshly painted kitchen makes the living room look tired, the project grows.

### “Is being house poor so bad when all you want to do is be in your house?”

It's personal — and Debbie answers from her own life. Her youngest son is autistic; the family works from home, homeschools, brings therapies to the house, and rarely goes out. For them, a bigger mortgage payment made sense: the house is their everything, and the restaurant-and-outings budget most families carry simply doesn't exist for them. Affordability and comfort are individual decisions — so stop polling the neighbors and co-workers, and walk your actual scenario through with a professional.

## This week's numbers (week of December 6, 2023 — averages, not quotes)

- Freddie Mac 30-year fixed average: **7.22%** for the week ending November 30 — down seven basis points, the fifth consecutive weekly decline
- October 2023 national average high for a conventional 30-year: about **7.75%**
- Debbie's same-day pricing check — conventional, primary residence, good credit, roughly one point: **6.875%**; FHA about **6.5%**; VA about **6.5%**
- Home equity lines and loans: averaging around **10%**, ranging from under 10% up to 13–14% by credit, equity, occupancy, and property type

*Your rate depends on FICO score, property type, loan balance, and loan purpose. These are national conforming averages for context, not a quote.*

### Rates just moved — find out what that does to your payment

Call [844-935-3634](tel:8449353634) (844-WE-LEND-4), [start an application](https://www.mortgagemomradio.com/apply/), or run your numbers with the [mortgage calculators](https://www.mortgagemomradio.com/tools/). Get the weekly rate rundown in the [newsletter](https://www.mortgagemomradio.com/newsletter/).

Full transcript (lightly edited for clarity) 

*Auto-generated captions cleaned for readability. Commercial breaks and repeated housekeeping have been trimmed; licensing information appears at the bottom of this page.*

### The turn in rates

Welcome to Mortgage Mom Radio. I'm Debbie Marcoux, the Mortgage Mom, and every week I bring you what's going on in housing, real estate, and mortgage. It has been a whirlwind since 2022: the Federal Reserve raised rates over 20 months, up and up and up — and for the last two meetings they have *not* increased, which is fabulous. Now, all of a sudden, we're starting to see interest rates come down. Today we're going to get you a good thumb on the market: where rates are, and what we expect in 2024 — is this the time to get yourself ready, pre-approved, ready to strike while the iron is hot when you find the right home?

Here's the headline: for five consecutive weeks, interest rates have come down. And 85% of first-time home buyers have said they've put their home-buying goal on hold. If you're one of that 85%, I want you out ahead of everybody else, so that when things get crazy you've already got the house.

### Q&A: the hard money refinance

Raul says he needs to refinance his second, investment house — and we're going to see a lot of that now. A lot of people purchased since 2022, when rates were significantly higher than where they are today and where they're heading. My best suggestion, Raul: stay active and stay watching — know your rate, know what you owe, and know your property type, because a single-family house, a condo, and a 2-to-4-unit all price differently on an investment refinance. Later he adds that it's a single-family home purchased with a hard money loan — then we have definitely got to get you refinanced, because that hard money loan is probably in the 10% range and we can do better on a normal investment refinance.

And for everyone who bought while rates were elevated: the very best rates go to the very highest credit scores. Keep those credit card balances low now, so when the right time comes you can obtain the best rate available.

### Q&A: seconds, firsts, and the blended rate

Michelle asks whether the rate on a home equity line is higher or lower than a mortgage rate. A home equity line of credit and a home equity loan are two different things, but both are second mortgages — separate from your first — and both carry a higher rate than a new first mortgage would. They're still a great idea for somebody with a large balance locked at a very low rate: if you have a $500,000 mortgage at 3% and want $100,000 out, the blend of 3% on $500,000 and even 10% on $100,000 is better than refinancing everything. But if you need $400,000 against that $500,000 first, now we're probably talking about a full refinance, because the first-mortgage rate is lower than any second's.

Sam asks what equity lines cost with great credit. On average I've been seeing home equity lines and loans around 10% — some under, some as high as 13 or 14% — and credit score is only part of it. How much equity stays in the home matters: owe $500,000 on a million-dollar home and take a $100,000 line, and you're still leaving 40% equity — you'll price far better than someone borrowing to 90% of value, even at the same score. Occupancy and property type factor in too.

### Where rates are: the Forbes piece and my own rate sheet

Now to the heart of today's show. I pulled a brand-new Forbes article — published December 1, so as current as it gets — called “When Will Home Prices Be Affordable Again?”, written by Robin Rothstein and Caroline Basile and edited by Chris Jennings; full credit to them, and I'd encourage you to read it. It opens: hopeful home buyers are getting an early holiday gift — declining mortgage rates. Since hitting a 2023 high in late October, the average 30-year fixed has receded by over half a percent.

Keep that half a percent in perspective. We didn't fall from 3% to 7.75% overnight — the national average for a conventional loan hit about 7.75% in October after 20 consecutive months of climbing — and we won't fall back overnight either. It's going to be gradual. But we're not hoping for the light at the end of the tunnel anymore; we're seeing it, and I can't tell you how exciting that is.

The numbers: the average 30-year fixed slid seven basis points to **7.22%** in the week ending November 30 — the fifth consecutive week of decreases, according to Freddie Mac. (A basis point is one-hundredth of a percentage point.) And because that data ends in November, I ran rates myself today, Wednesday, to bring you current: a primary-residence single-family home, good credit score, buying the rate down with about one point — we were at **6.875%** conventional. Under 7%. That is a humongous change. FHA was quoting around 6.5% with that same point, and VA about 6.5% as well.

Every person's scenario is different — credit score, property, down payment, occupancy — so these aren't the rates *you* will get; they're the beat of the market. But here's why it matters already: if your first mortgage is in the fives and you also carry a home equity line or loan in the tens, it might already be time to consolidate into one payment — and then refinance that one loan even lower as we move through 2024.

### Q&A: HELOC mechanics

Michelle asks whether a home equity line looks negative to creditors even at a zero balance. No — think of it like a credit card. A line that's open and unused keeps your debt ratio low: a $50,000 or $100,000 line with nothing owed actually improves your credit score by quite a bit. Use it, and you'll owe an interest-only minimum on the balance — but the open availability itself is a positive.

She follows up: if it's interest-only, then it's no good, is it? It depends on you. If you're taking a $50,000 line and you're going to use all of it to pay off debt or remodel, with no means to pay it back quickly, an interest-only minimum that never pays the balance down is not what I'd recommend — get a home equity *loan* with a principal-and-interest payment, like your house or your car, where every payment moves the balance. If the line is a safety net, or you're flipping — buy the fixer with the line, renovate, sell, pay it off, keep the access for the next one — interest-only is exactly right. Sam adds that sometimes interest-only makes better sense if you're staying seven years or more — and it truly does depend. A lot of interest-only firsts are adjustable: people buy planning to move in two or three years, life happens, they're still there when the five- or seven-year fixed period ends, the payment goes principal-and-interest and nearly doubles, and the home they thought they were leaving is suddenly unaffordable. Most people don't stay 30 years — but plenty stay 7, 10, 12, so be careful how short a runway you set up.

Can you have both a HELOC loan and a line on the same house if there's enough equity? Most lenders treat each as a second mortgage, and one of each means somebody is in third position. The deeper you sit on title behind first position, the harder it is to recoup your money if the property forecloses — the first gets paid, then the second, and if there's nothing left, the third may get nothing at all. That's why a second prices above a first and a third above a second, and why most lenders won't write thirds. Some will — it's doable — but it is very hard to find.

### Get ahead of the herd

I've been saying it week after week: be ready to strike while the iron is hot. You do not want to be shopping when all 85% of those sidelined first-time buyers decide at the same moment that rates are good enough, all chasing the same inventory, offers flying, prices jumping. And it's starting: with rates falling five straight weeks, **purchase applications have now increased for the fifth straight week** too. People are starting to feel it — that gut feeling that it's time.

### Q&A: will we see 3% again?

Michael asks: what's the likelihood of rates ever dropping back to 3% or under? Barring something drastic — another pandemic-scale national disaster that forces the Fed to the floor — I don't think we see 3% again in our lifetimes. What most of the experts I read are anticipating is that we eventually settle into the very high 4s to low 5s as the average mortgage rate. I think we will see those numbers again, and they're good planning numbers for what a payment might look like. My crystal ball is broken like everyone else's — but that's the honest picture.

Michael was fortunate enough to refinance at 2.99% in 2021 — and he's exactly why this market held. People with sub-3% rates are not selling, which keeps inventory low, which keeps home values up. Even with mortgage rates the highest we've seen in a very long time, we've watched homes *appreciate* — where historically, rates like these came with a housing bust. All those locked-in low rates have helped hold the housing economy steady.

### New Fannie Mae program and higher loan limits

Quick preview of something we'll detail next week, because I love it: Fannie Mae just rolled out a **5% down payment program for owner-occupied 2-to-4-unit properties**. Until now, buying a duplex to live in one unit and rent the other took 15% down, and a 3-to-4-unit took 25% down. Now it's 5%. If you've wanted to house-hack a duplex or fourplex and the down payment was the wall — that wall just came down. Conventional loan limits also got their annual increase, which helps you into those 3-and-4-unit properties without jumping to jumbo pricing, and FHA raised its loan amounts too: in a high-cost area like LA County, you can now get an FHA mortgage with 3.5% down at loan amounts well over a million dollars. We'll break down the specifics next week.

### Buy what you can afford — the Forbes bottom line

The Forbes piece walks through the 2024 questions — will the market crash, will foreclosures rise, should I wait — and lands where I always land. Buying a house is a highly personal decision; a home is the largest single purchase most people make. Trying to predict next year is probably not the best home-buying strategy, because housing is almost impossible to time. The best time for a buyer is when you find the home you like, that meets your family's current and foreseeable needs, that you can afford. Don't bite off more than you can chew on the theory that the future will rescue you — buy what you can afford today, and then the future holds only more: rates will drop, you'll refinance, the payment comes down, and the equity builds. You reap those rewards down the road.

### Q&A: sizing the loan, and the house-poor question

Michelle asks whether it's wise to take a larger loan than she needs, just in case — and pay it off sooner with whatever goes unused. We need to talk about what the money is for: IRS debt, rehabbing the house, monthly debts? And how fast can you realistically pay it back? That's what determines the right product and the right size. On home improvements, here's my standing rule: whatever the contractor's bid says, add 20%. The minute they open walls there are repairs you didn't count on, and the minute the kitchen is repainted, the living room next to it looks old and dirty and you're painting that too.

Serena asks: is house poor so bad when all you want to do is be in your house? I'll give you a twist on this one from my own life. My youngest son is autistic. We don't go anywhere — we live in our home. I work from home, we run our businesses from home, we're homeschooling, his therapies come to the house; we put him in the stroller and take walks, and a couple of times each summer we manage the boat, which is why we moved closer to the lake. So for me, it was okay to carry a bigger mortgage payment: the home is our everything, and the restaurants, movies, and outings an average family budgets for just aren't part of our monthly spending. It's hard — and it has changed our family absolutely for the better; he is a gift. The point for you: what's affordable and comfortable is a personal decision built on your actual life. Stop listening to the neighbors, your friends, your co-workers — people who aren't in the business. Sit down with professionals, walk through your scenario, and decide what's comfortable for *you*.

### Wrap-up

Rates are coming down, applications are picking up — if buying in 2024 is your goal, now is the time to get moving, and if you took a high-rate mortgage over the last year or so, get on our list so we can call you the moment rates hit your number. I'll be back next week to dig into that Fannie Mae 2-to-4-unit program and the new loan limits — then I'm dark for the last two weeks of December for the holidays, back the first Wednesday of January. To catch the shows live, text the word MOM to 844-935-3634 — that's 844-WE-LEND-4 — and you'll get one text a week with the link when I go live. Talk to you all soon.

Debbie Marcoux is licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, NMLS ID #237926, and additionally licensed in AZ (0941504), FL, GA, HI, ID, IL, NV, NC, OR, TN, TX, and WA. Rates and figures discussed were current as of the air date of December 6, 2023, reflect national conforming averages, and are not an offer of credit or a rate quote. Debbie Marcoux is not a financial advisor; consult qualified professionals about your individual situation.