The U.S. economy is set to face a rollercoaster ride in 2024, according to a recent report by LendingTree.
Despite the resilience shown in areas like low unemployment, cooling inflation growth, and a steadily growing GDP, the economy isn’t without its hurdles.
High inflation, soaring housing costs, increasing debt delinquencies, low personal savings rates, and high household debt are all part of the mix.
Jacob Channel, LendingTree’s senior economist, warns, “Like any year, 2024 will doubtlessly be harder for some than it is for others.” Here’s a snapshot of what to expect:
- Mortgage Rates May Dip Below 6.00%: The average interest rate for 30-year fixed mortgages could fall to around 6.00% by the end of 2024. A stabilized mortgage market is expected, especially if inflation improves and the bond market remains calm.
- Inflation to Ease, but Not Hit Fed’s Target: Inflation growth is predicted to fall to the mid-2% range, indicating improvement compared to 2023. While not reaching the Federal Reserve’s 2% target, this trend suggests a more stable pricing environment.
- Housing Market to See Moderate Activity: Lower mortgage rates might boost homebuyer demand, but affordability challenges will persist. The market is unlikely to reach the intensity of the pandemic era, and additional housing supply won’t cause drastic price movements.
- Federal Reserve Expected to Cut Rates: The Federal Reserve is anticipated to cut rates in 2024, likely starting closer to the summer. Gradual reductions are expected, signaling the Fed’s confidence in addressing inflation concerns and lowering borrowing costs for consumers.
- Moderate Increase in Unemployment: A slight rise in the unemployment rate is projected as businesses and consumers navigate relatively high interest rates. Despite the increase, the unemployment rate is expected to remain within manageable levels.
- U.S. Economy to Avoid Recession: While economic growth may slow, a recession is unlikely to occur in 2024. The U.S. economy has demonstrated resilience, and even if growth moderates, it is expected to avoid significant contraction.
In a nutshell, 2024 is shaping up to be a year of economic ups and downs. But as the saying goes, “When the going gets tough, the tough get going.” So, buckle up and prepare for the ride.
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