December 20, 2023
Mortgage Rates Below 7% – Will they continue to Decrease?
Great news for home buyers! Mortgage rates just dropped below 7% for the first time since August. For the week ending Dec. 14, rates for a 30-year fixed-rate home loan averaged 6.95%, according to Freddie Mac, and are projected to continue on a downward trend.
With inflation deceleration and the target rate lowering, the housing market is predicted to pick up. But lower rates aren’t all homebuyers are being gifted within the new year, there has also been an increase in inventory in the last couple of weeks, signifying that hesitant buyers and sellers could finally be entering the market in 2024, and the mortgage lock-in effect is easing as well.
The Economic Good Cheer
- 199,000 new jobs have been added to the economy in November
- The annual rate of inflation dropped to 3.1% in November, down from 3.2% in October.
- The Federal Reserve voted to hold the short-term policy rate steady
Stubborn Home Prices Could Fall
On the topic of good news, there is a good chance that home prices will begin to fall, helping with affordability as a whole. In June, prices peaked at $441,000, and have since fallen to $420,000 in November.
“The nation’s median listing price has been declining seasonally and is 6.8% below this year’s peak,” points out Speianu. “With seasonality so far this autumn tracking similarly to last year, the median list price may decrease another 2% by the end of the year.”
Although there is an increase in active listings, inventory is still declining for the winter season as normal. We can expect the usual winter months of low activity until about March, but we are looking forward to a blossoming Spring season for listings. If this is the case home buyers will have to act fast as the competition will be high.