🏡 Rates & Home Prices Continue To Go Up

1. Housing Market Update: Buyers Backing Out As Mortgage Rates Soar Toward 8%

Home purchases fell through at the highest rate in almost a year due to rising mortgage rates.

• ❗️ Reason for falling through: Buyers are backing out due to rising mortgage rates and concerns about getting a good deal.

• ⬆️ Impact on pending sales: Pending home sales rose slightly, but closed sales fell to the lowest level since the pandemic began.

• ↕️ Price trend: Median home sale prices rose 1.9% year over year, despite sluggish demand.

• 🏠 Limited supply: Competition remains high due to a limited supply of homes for sale

2. Goldman Sachs Forecast: Mortgage Rates Will Stay High Through 2024

Mortgage rates will stay high through 2024, keeping homeowners off the market and pushing existing home sales to a 3-decade low.

• 💲 Mortgage Rates: Mortgage rates will dip to just under 7% at year-end 2024

• 🔄 Housing Turnover Rate: The housing turnover rate will fall to its lowest since the 1990s

• 📊 Price Growth: Moderate price growth of 1.3% year-on-year is expected in 2024

• 🏠 Housing Market Rebound: Hopes for a 2024 housing market rebound should be kept in check due to high mortgage rates

3. Adjustable-rate mortgages are making a comeback

Adjustable-rate mortgages are gaining traction as fixed-rate mortgage rates reach historic highs.

• 💲 Current mortgage rates: The average rate for a 30-year fixed-rate loan is 7.67%, while a 5/1 ARM dropped to 6.33%

• 📊 Increased ARM applications: Mortgage applications increased due to a 15% jump in ARM applications

• ❗️ Less risky but still uncertain: Stricter regulations and transparency have made ARMs less risky, but the interest rate can still go up after the fixed period

4. Home prices still expected to grow

Mortgage originations are expected to increase by 19% in 2024 due to a recession that will lead to lower interest rates, according to the Mortgage Bankers Association (MBA).

• ⬆️ Reason for surge: A mild recession will prompt the Fed to ease interest rates, resulting in lower mortgage rates

• 💲 Origination volume: Mortgage originations are estimated to reach 5.2 million loans by count and $1.94 trillion in volume in 2024

• 🏠 Impact on home prices: Despite lower mortgage rates, home prices are still expected to appreciate for the next three years due to low inventory

5. Housing Crash Unlikely Due to Strong Prices and Low Supply

Housing market crash is unlikely due to low housing supply and strong homeowner balance sheets.

• 💲 Home prices: Home prices continue to rise due to low housing supply and high demand

• 📊 Market correction: Any market correction is expected to be modest, not on the scale of the Great Recession

• 💳 Homeowner balance sheets: Homeowners have strong credit, home equity, and fixed-rate mortgages below 5%

• 🏠 Low housing supply: The shortage of homes for sale contributes to the stability of home prices

6. Our recent educational videos

How We Shop For Your Mortgage Rate:

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