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 April 26th to May 2nd, interest rates increased slightly due to the employment cost index showing a bit stronger wage growth month-to-month. Inflation ran hot over the last couple of years, but with already-high rates and a clear cooling trend recently, the Fed has decided to leave rates steady for now. Additionally, Federal Reserve Chair Jerome Powell said it was unlikely that the central bank’s next move would be a rate hike.
Fed Watch:
Target rate (in bps) possibilities, according to the CME Group:
|
Upcoming Federal Reserve Meeting Dates |
Current (5.25% - 5.50%) |
0.25% Reduction (5.00% - 5.25%) |
0.5% Reduction (4.75% - 5.00%) |
|
June 12 |
91.1% |
8.9% |
0.0% |
|
July 31 |
70.4% |
27.6% |
2.0% |
|
September 18 |
43.6% |
43.9% |
11.7% |
Market Review:
Per Black Knight's Production Metrics, the breakdown of mortgage production volume is as follows: 88.80% for purchase transactions, 8.61% for cash-out refinances, and 2.59% for rate and term refinances.
April 2024 Spotlight:
The 2024 spring homebuying season: An early preview using mortgage application data:
Per Black Knight 50.32% of all Retail loan production were Government Loans (FHA, VA, USDA), while 49.68% were Conventional and Non-Conforming loans.
Property Percentages:
The total value of American property, excluding farmland, is $66 trillion. Of that, 25% is commercial, and of that, office space is probably $4 trillion. Between 2007 and 2009, US residential real estate lost a third of its value, which today would mean a decline of $16 trillion. Even if office values fall by half that would be just $2 trillion in losses, enough to be painful but not more.
- Elliot F. Eisenberg, former Sr. Economist with National Association of Home Builders
News You Can Use:
- Federal Reserve issues FOMC statement
- Freddie Mac House Price Index Increased in March; Up 6.6% Year-over-year
- States with Highest and Fastest Rising Construction Wages, 2024
- FHFA Announces Enterprise Reconsideration of Value Policies
- This Popular Spot for Homebuyers Has Nearly 57% of the U.S. Housing Inventory—and It’s Affordable
*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 04/25/2024, 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 04/25/2024 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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