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 Feb 23rd – Feb 29th, 30-year and 15-year interest rates increased.
The National Association of Realtors™ does expect mortgage rates to steady in the 6% range by year's end, but it will take a lot of ups and downs to arrive there ultimately. The Fed has a firm 2% inflation rate goal and with favorable economic reports on the job market, it's unlikely they will cut rates until that goal becomes more of a reality. The latest announcement from the Fed kept rates steady again, signaling things are on the right track and hopeful homebuyers may have a more favorable market in 2024.
Strong economic data has pushed back expectations of when mortgage rates will drop, but experts still believe they'll go down this year. We just probably won't see them drop as soon as many initially anticipated. Analysts with Fannie Mae and the Mortgage Bankers Association (MBA) both project that rates will fall going into 2024 and throughout next year. Fannie Mae economists expect rates to drop more quickly, falling below 6% by Q4 2024. Meanwhile, the MBA’s forecast for Q4 2024 is 6.1% and 5.9% for Q1 2025.
Fed Watch:
Looking ahead, all eyes are now on the upcoming March 20th, Federal Open Market Committee (FOMC) meeting. According to the CME Group, 0.00% of forecasters predict an increase in interest rates, while 97.5% predict rates will remain the same. 2.5% of forecasters expect rates to decrease.
Market Review:
Per Black Knight's Production Metrics, the breakdown of mortgage production volume is as follows: 78.05% for purchase transactions, 18.43% for cash-out refinances, and 3.52% for rate and term refinances.
Per Black Knight 56.85% of all Retail loan production were Government Loans (FHA, VA, USDA), while 43.15% were Conventional and Non-Conforming loans.
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U.S. Median House Prices vs. Income:
News You Can Use:
- New Home Sales Picked Up 1.5% in January
- Home Prices Hit a New All-Time High in December, Says Case-Shiller
- How much money do you need to buy a $400,000 house with a 7% mortgage rate?
- Paradox: Home Prices Face Both Head Winds and Rising Tides
*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 02/29/2024, 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 02/29/2024 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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