Market Update - December 22, 2023

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 Optimal Blue. Rates are updated in real-time. Optimal Blue data is calculated using actual locked rates with consumers across 42% of all mortgage transactions nationwide. Rates are inclusive of locks that occur below par, at par and therefore consider discounts and rebates.

Market Commentary:

For the week of Dec 15th – Dec 21st, 30-year and 15-year interest rates decreased slightly. The markets are in the holiday spirit and rates keep coming down, with the 30-year fixed having dropped from a high in the 8’s to less than 6.750%. For our Veterans and FHA borrowers, rates with reasonable discount points can be found starting in the 5’s. The 10-year Treasury has declined from a high in late October of 5% to 3.838 on 12/21/2023. With rates declining, home affordability has increased by as much as 20%, based on the loan products and interest rates selected.

Home Affordability Scenraio - 500K Loan Amount - 12_21_2023

For Illustration Purposes Only.

Fed Watch: Looking ahead, all eyes are now on the upcoming January 31st, Federal Open Market Committee (FOMC) meeting. According to the CME Group, 0.0% of forecasters predict an increase in interest rates, while 85.5% predict rates will remain the same. 14.5% of forecasters expect rates to decrease.

Quick Look Back - Market Update Weekly Calendar - 12_21_2023


Per Optimal Blue Analytics, the breakdown of mortgage lock production volume for this week was: 53.27% for purchase transactions, 36.16% for cash-out refinances, and 10.57% for rate and term refinances.

Per Optimal Blue data analytics: FHA and VA loans once again are the dominant loan programs locked in the past week. Government loans accounted for 68.47% of loan volume while Conventional loans accounted for 31.5% of loan lock volume.



News You Can Use:

*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 12/21/2023, 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 12/21/2023 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.