Market Update - January 12, 2023

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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.

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Market Commentary:

For the week of Jan 5th – Jan 11th, 30-year and 15-year interest rates remained steady.

Between late October and mid-December, the 30-year fixed-rate mortgage plummeted by more than a percentage point. However, since then rates have moved sideways as the market continues to digest incoming economic data. Given the expectation of rate cuts this year from the Federal Reserve, as well as receding inflationary pressures, mortgage rates will likely continue to drift downward as the year unfolds.

Overall, the economy has been showing signs of cooling, which is good news for mortgage rates. And most experts believe that mortgage rates will go down even more in 2024.

Lower mortgage rates have many hopeful homebuyers feeling better about their prospects in 2024. According to Fannie Mae's December National Housing Survey, the number of consumers who expect mortgage rates to go down in the next 12 months went up to 31%, a survey high.

Fed Watch:

Looking ahead, all eyes are now on the upcoming January 31st, Federal Open Market Committee (FOMC) meeting. According to the CME Group, 0.00% of forecasters predict an increase in interest rates, while 97.4% predict rates will remain the same. 2.6% of forecasters expect rates to decrease. At the March 20, 2024, FOMC meeting, 67.1% predict the Fed will lower interest rates by 0.25% point and 1.8% predict 0.5% rate reduction.

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Quick Look Back - Market Update Weekly Calendar - 01_11_2024

 

Market Review:

Per Black Knight's Production Metrics, the breakdown of mortgage production volume is as follows: 83.571% for purchase transactions, 11.67% for cash-out refinances, and 4.77% for rate and term refinances.

Per Black Knight 56.60 of all Retail loan production were Government Loans (FHA, VA, USDA), while 43.40% were Conventional and Non-Conforming loans.

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‍*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 01/11/2023, 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 01/11/2023 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.

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