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 Polly. Rates are updated in real-time. Polly data is calculated using actual locked rates. Rates are inclusive of locks that occur below par, at par and therefore consider discounts and rebates.
Market Commentary:
For the week of Jan 26th – Feb 1st, 30-year and 15-year interest rates remained steady.
While rates remain elevated, the Fed recently signaled that it will begin to cut rates in 2024, indicating a further downward shift in mortgage rates may soon come. With the 30-year rate seeming stable for now, borrowers have begun to resurface. “The combination of strong consumer demand and somewhat lower mortgage rates should support a more robust spring housing market this year,” says Mike Fratantoni, chief economist of the Mortgage Bankers Association.
The U.S. economy has been solid over the past year. Economic activity was robust, unemployment remained under 4%, and inflation trended down. Federal Reserve Chair Jerome Powell said Wednesday that the expectation is there's more disinflation to come. “This is a good situation. Let's be honest, this is a good economy,” he said. While inflation is still above target, Powell acknowledged that the U.S. economy seems to be on track for achieving that goal. Right now, Powell said, the economy is shaping up to be a “good picture.”
Fed Watch:
Looking ahead, all eyes are now on the upcoming March 20th, Federal Open Market Committee (FOMC) meeting. According to the CME Group, 0.00% of forecasters predict an increase in interest rates, while 64.5% predict rates will remain the same. 35.5% of forecasters expect rates to decrease.
Market Review:
Per Black Knight's Production Metrics, the breakdown of mortgage production volume is as follows: 72.15% for purchase transactions, 21.86% for cash-out refinances, and 5.99% for rate and term refinances.
Per Black Knight 66.54% of all Retail loan production were Government Loans (FHA, VA, USDA), while 33.46% were Conventional and Non-Conforming loans.
News You Can Use:
- Fannie Mae: Economic Growth Beat Expectations to End 2023; Home Sales Poised to Trend Upward
- Rates Drop Significantly on Fed Day, But Not Because of The Fed
- Fannie Mae Economists Forecast Slow But Steady Recovery in Mortgage Industry
- NAR: Pending Home Sales Climbed 8.3% in December
- Early Signs of Mortgage Rate Optimism Heading into 2024
- Is the Housing Market Bouncing Back—or Bouncing Back and Forth?
*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 02/01/2024, 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 02/01/2024 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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