Mortgage & Housing Update 12/1/2023

 

The holiday season is delivering early gifts to would-be buyers. Average 30-yr mortgage rates have dropped nearly 1% in the last month, and inventory levels are climbing. That said, home prices continue to rise across the country, with the Case-Shiller national home prices index already up 4.6% year-to-date.

Welcome to my Mortgage & Housing Update. My name is Pauline Lee. I am a seasoned real estate professional, with expertise in financing and partnered with excellent real estate agents. My goal here is to help you understand the current trends, to help you make decisions toward your real estate goals. Let’s connect to talk about your specific scenario. Find me through the links in my bio or comments. I encourage you to get pre-approved.

Pauline Lee | (617) 965-1988 x205 | pauline@indmortgage.com

Broad-based price rise

Case-Shiller's national home price index rose 0.7% month-over-month in September - the 8th-straight monthly increase. Year-to-date, the national index is now up 4.6%, with the major city home price indexes up between 1.1% (Portland) and 8.2% (San Diego). 13 of the 20 big city indexes are at record levels, having already erased the modest decline seen in the 2H 2022.

Finding a bottom?

Sales of existing (previously owned) homes have declined in 19 of the last 20 months, as rising mortgage rates and home prices crushed affordability and inventory levels remained low. MoM, existing home sales fell 4% to an annualized rate of 3.79 million, a 13-year low and a 40% plunge from the January 2022 level of 6.34 million. 

The National Association of Realtors is bullish, feeling this downturn coming to an end. NAR forecasts a 15% recovery in transaction volumes next year, driven mostly by their assumption that 30-year mortgage rates will drop below 7% by 2024. 

Mortgage rates near 7%

Having climbed relentlessly for most of 2023 (from just below 6% to just over 8%!), average 30-year mortgage rates have plunged in recent weeks to near 7%. The most recent drop was driven by: 1) surprisingly “dovish” comments from Fed officials, and 2) better than expected inflation figures. 

Is 7% still high? Yes. But with inflation continuing to trend lower, the market is increasingly convinced that the Fed is done hiking rates and could start CUTTING rates in the first half of 2024.

Thank you for tuning into my Mortgage & Housing Update. My name is Pauline Lee. I am an independent real estate professional. I would be happy to connect with you to talk about your specific scenario. Find me through the links in my bio or comments. I encourage you to get pre-approved.

Pauline Lee | (617) 965-1988 x205 | pauline@indmortgage.com

 

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.