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
Mortgages rates remained flat for the week but should continue declining this year and next as the U.S. economy slows, inflation cools, and the Federal Reserve continues to cut interest rates. The 30-year fixed mortgage rate is expected to fall to the low-6% range through the end of 2024, dipping into high-5% territory in early 2025 – as per US News article dated 11/8.
Good things may come to those who wait, but patience doesn't always pay off in the housing market. Two-thirds of homebuyers are waiting for mortgage rates to fall this year before buying a home, according to a March U.S. News survey. The vast majority of them (85%) wanted to see rates below 6% before entering the market, which hasn't happened – and it isn't expected to happen until 2025.
In the time that homebuyers have been holding out for lower rates, home prices have continued to rise. Since the beginning of 2024 alone, home prices have appreciated by 4.5%, according to the S&P CoreLogic Case-Shiller Home Price Index.
Real estate markets are expected to stabilize this year – but buyers shouldn't expect housing prices to come crashing down, at least not on a national level.
Fed Watch: Target rate (in bps) possibilities, according to the CME Group (as of 11/21/2024 – 12:30 PM EST):
Market Review: Optimal Blue’s Production Metrics:
Climate-Risk Homes Are Gaining Value Faster Than Low-Risk Homes:
Public Payroll
There are 2.3 million civilians working for Uncle Sam. 70% are in military/security related agencies. Veteran’s Affairs is the largest cabinet-level department/military branch with 486,522 employees, it’s the hospitals. Homeland Security follows at 222,539, then Army with 221,0437, Navy at 216,537, Air Force at 168,505, and Defense with 156,803. Education is the smallest with 4,425. Civilian payroll is $213 billion/year, while the FY24 deficit was $1.83 trillion, 9x payroll. - Elliot Eisenberg, Ph.D. , Economist
News You Can Use
- Jobless claims drop to seven-month low as the U.S. economy plows ahead
- Homes With Low Natural Disaster Risk Are Rising in Value Faster Than Homes With High Risk for the First Time in Over a Decade
- 5 major U.S. cities where it’s easier for Gen Z to afford rent than it was for millennials at the same age
- Early-Stage Homebuying Demand Jumps to Its Highest Level in 15 Months Despite High Mortgage Rates
- Recent Rate Run-Up Expected to Keep Existing Home Sales Near Historic Lows Through 2025 - Fannie Mae
- Fed to lower rates in Dec but slow pace in 2025 on inflation risks: Reuters poll
*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 11/21/2024, 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 11/21/2024 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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