Happy New Year! May 2024 be your best year yet! On that note, if you’re planning a home purchase, mortgage rates have dropped to their best levels since last May.
And interestingly, the 10-year Treasury Note – which mortgage rates often follow – ended 2023 at similar levels as it started 2023. Mortgage rates behaved similarly with average rates for the 30-year fixed mortgage only.19 percent higher at the end of 2023 than where they began 2023, according to Freddie Mac’s published survey data.
Why the improvement in rates, you ask? Well, the U.S. rates are following a global trend of declining interest rates as economies slow down. Fortunately, our economy is not slowing down as rapidly as others around the globe. It’s also expected that the Fed will begin cutting rates in 2024.
However, the rapid descent of mortgage rates that we’ve seen over the past couple months has leveled off, and average rates dropped by just .06 percent for the 30-year fixed.
As for what I’m watching this week…
With Monday’s New Year’s holiday, we have a shortened week, which all culminates in Friday’s monthly Job’s Report, the most important economic report we see all month.
Prior to the monthly Jobs Report we get a look at private sector job growth with the ADP Employment Report, which this month comes out on Thursday. Last month, the job creation number came in at 103,000. This month’s forecasters see ADP’s December employment number at 115,000. This would compare with November growth in private payrolls reported by the Bureau of Labor Statistics of 150,000.
Friday’s main event is the government’s overall Employment Situation report for the nation. A 158,000 rise is the consensus for job growth in December versus 199,000 growth in November, which was on the high side of the consensus range.
Average hourly earnings in December are expected to rise 0.3 percent on the month for a year-over-year rate of 3.9 percent, a touch less than last month. December’s unemployment rate is expected to rise 1 tenth to 3.8 percent from November’s 3.7 percent, which was 2 tenths lower than expected.
And finally, we’re starting to see home affordability rise as the drop in mortgage rates takes hold. The Mortgage Bankers Association reported a decrease in the national median mortgage payment, which they’re expecting will generate increased demand heading into the spring homebuying season.
If you’d like to explore your home purchase financing options, let’s talk. Send me an email or call/text me at 818.307.6072.
Cheers to the New Year!
