This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.
Rates are provided by Housing Wire in conjunction with Polly. Rates are updated in real-time. Polly data is calculated using actual locked rates. Rates are inclusive of locks that occur below par, at par and therefore consider discounts and rebates.
Market Commentary:
For the week of May 31st to June 6th, interest rates remained flat. “Mortgage rates retreated this week given incoming data showing slower growth,” said Sam Khater, Freddie Mac’s Chief Economist. “Rates are just shy of seven percent, and we expect them to modestly decline over the remainder of 2024.
Internationally, for the first time we are seeing rate cuts. The European Central Bank cut rates for the first time since 2019 and Bank of Canada cut rates, with expectation on more cuts to come.
Fed Watch:
Target rate (in bps) possibilities, according to the CME Group:
|
Upcoming Federal Reserve Meeting Dates |
Current (5.25% - 5.50%) |
0.25% Reduction (5.00% - 5.25%) |
0.5% Reduction (4.75% - 5.00%) |
|
June 12 |
99.9% |
0.0% |
0.0% |
|
July 31 |
83.4% |
16.5% |
0.1% |
|
September 18 |
58.0% |
10.2% |
31.7% |
|
November 7 |
19.5% |
47.8% |
28.7% |
|
December 18 |
6.0% |
28.2% |
41.9% |
Market Review:
Optimal Blue’s Production Metrics:
Withering Withdrawals:
During the run-up to the Housing Bust, home prices surged and the value of revolving home equity loans rose dramatically from $185 billion in 2002 to $603 billion in 2009 as households tapped into their home equity and supercharged the economy. Now, despite large home price increases, the value of revolving home equity loans has been stagnant at $250 billion/year since 2021Q3, and thus no assist to household spending.
- Elliot Eisenberg, Ph.D. , Economist
News You Can Use:
- A key home price metric has skyrocketed since 2019
- Bought a Home Pre-Pandemic? Here’s How Much It’s Worth Now (Break Out the Champagne)
- Loan Performance Insights – May 2024
- com Reports Active Inventory Up 35.5% YoY
- European Central Bank cuts interest rates for the first time since 2019
*Communication is intended for Industry Professionals only and not intended for Consumer Distribution
Interest rate and annual percentage rate (APR) are based on current market conditions as of 06/06/2024, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Prosperity Home Mortgage, LLC. Not available in all states. Rate is as of 06/06/2024 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac's economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac's business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an "as is" basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.
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