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.
Market Commentary
Interest rates remained flat for the week of December 13th - December 19th similar average to what they were at this time in 2023. The Federal Reserve cut its policy rate by 25 basis points, or a quarter of a percentage point, and signaled a much slower pace of cuts in 2025. After the Fed’s comments, mortgage rates have subsequently increased. The 10 Year Treasury is the highest it’s been in the last three months. The Fed penciled in 50 basis points of cuts in 2025 in its ‘dot plot’ projections of future moves, down from 100 basis points in cuts projected in September. Fed Chair Jerome Powell will provide updates on the outlook for monetary policy and the economy as a new Trump administration prepares to take office. The move lowers the Fed's benchmark rate to a range of 4.25%-4.5%.
Fed Watch: Target rate (in bps) possibilities, according to the CME Group (as of 12/19/2024 – 12:30 PM EST):
Market Review: Optimal Blue's Production Metrics:
Opportunities to target renters and investors:
Silver Tsunami
Silver Tsunami is likely to bring wave of wealth to children of baby boomer homeowners. New research indicates boomers hold $17 trillion of the country’s total home equity. Three quarters of homeowners born before 1964 are likely to leave much of their $17 trillion in home equity to their children, according to Freddie Mac’s latest analysis of the housing perceptions, preferences and plans of Baby Boomers. Freddie Mac’s new, comprehensive survey of respondents 60 or older also highlights that the majority of Boomers who own a home feel confident they will have a financially comfortable retirement. This is accompanied by a growing preference of some Boomers to downsize.
News You Can Use
- The Fed cut interest rates by another 25 basis points—here’s what will get cheaper
- The Fed’s rate outlook has rattled markets. Here’s what it means for global central banks
- Housing Market Unlikely to Thaw in 2025 Due to Affordability Challenges and 'Lock-in Effect'
- November home sales surged more than expected, boosted by lower mortgage rates
- US single-family housing starts rebound; tariffs an obstacle
- Single-Family Starts Posts Solid Gain While Multifamily Falters
Interest rate and annual percentage rate (APR) are based on current market conditions as of 1, 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 1/2024 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.
.png)
.png)
.png)
.png)
