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.
For the week of Nov 3rd – Nov 9th, 30-year and 15-year interest rates decreased.
Mortgage rates saw the biggest one-week drop in over a year last week, causing the first increase in mortgage demand in a month. Total mortgage application volume rose 2.5% last week, compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
It's not clear whether the Fed will raise rates again before the year is out, although investors don't expect another rate hike in 2023. During the Fed's November rate-setting meeting, policymakers voted to hold the rate steady at 5.25% to 5.5%, and MBA's Fratantoni says the central bank "is likely to pause at this level for some time" before moving to cut rates in the second quarter of 2024.
"If the Fed does indeed move to cut rates next year and signals its intent to do so, mortgage rates should trend downward," Fratantoni says. "Our forecast calls for this to happen, which would support a somewhat stronger spring housing market."
Mortgage Interest Rate Predictions for 2024-2025, as of 11/09/2023:
Fed Watch: Looking ahead, all eyes are now on the upcoming December 13th Federal Open Market Committee (FOMC) meeting. According to the CME Group, 9.5% of forecasters predict an increase in interest rates, while 90.5% predict rates will remain the same. None of the forecasters expect rates to decrease.
Per Black Knight's Production Metrics, the breakdown of mortgage production volume is as follows: 84.39% for purchase transactions, 12.90% for cash-out refinances, and 2.71% for rate and term refinances.
Per Black Knight 59.11% of all Retail loan production were Government Loans (FHA, VA, USDA), while 40.89% were Conventional and Non-Conforming loans.
*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 11/10/2023, 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 11/10/2023 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.