Mortgage rates continued to move sideways this last week, according to the latest survey of average rates published by Freddie Mac. After watching average mortgage rates drop by more than a percentage point in October and December, we all got excited to see rates continue to fall, but they haven’t. They also haven’t gone back up, either, thankfully.
However, according to Sam Khater, Freddie Mac’s Chief Economist, expectations are that rates will continue to drift lower as the year unfolds. As a result, we’re starting to see more positive momentum in housing, starting with an uptick in inventory – homes on the market – and mortgage applications.
Lawrence Young, Chief Economist for the National Association of Realtors, expects far more purchase activity in 2024, citing pent-up demand in the market.
All that being said, if you are considering a purchase this year, you’d be wise to reach out and let’s chat about a plan for you so that you are ready to take the leap on your next home when the time and the home is right. Call or text me at 818.307.6072, and let’s catch up!
Friday’s Jobs Report seemed rather positive if you saw how the media portrayed it. However, when we take a closer look, the economy lost 1.5 million jobs in December, according to the Household survey, which is part of the report, and a record-high 8.5 million people are working multiple jobs. What does this mean for rates? Firstly, we didn’t see rates rise, even with all the positive headlines, and if similar weakness continues, the Fed could end up dropping rates sooner than anticipated, which could help mortgage rates continue lower.
As for what I’m watching this week…
We have a holiday-shortened week thanks to the observance of the Martin Luther King Jr. holiday on Monday. All banks and markets were closed. So, as we kick off the week, there are just a few important economic reports due out.
The final numbers for December’s Retail Sales come out. Consumer activity represents two-thirds of our gross domestic product in this country, so analysts watch this data closely. December sales are expected to rise a respectable 0.4 percent versus November’s surprising 0.3 percent gain which compared with expectations for a small decline.
As for housing data, we’ll get a look at the leading indicator, New Housing Starts and Building Permits. Housing starts in December are expected to fall back sharply to a 1.43 million annual rate versus November’s rate of 1.56 million, that was much better than expected. Permits, at a lower-than-expected 1.46 million in November, are expected to rise to 1.48 million.
Finally, on Friday we get a look at Existing Home Sales. Sales are expected to hold at November’s as-expected 3.82 million annual rate. Low inventory of homes for sales along with high prices and high interest rates, have been constraining sales.
