Good Monday Morning! 

Despite the Fed's rate cuts, mortgage interest rates remain stagnant. There is much more that affects mortgage interest rate levels than just what the Fed does. Mortgage rates are affected by our huge national debt, the overall economy, and a variety of other factors. The 30-year average for mortgage rates is around 8.5%, and we have experienced some really great housing markets with rates higher than they are today. There are other factors that affect our national housing market as much or even more than interest rates. The overall inventory of homes for sale, inflation, the economic health of the country, job numbers, and property tax levels all have a huge impact on the housing market. If mortgage rates remain stable where they are today and any of the other factors I mention improve, we will witness a much-improved housing market in the future. The following is an article from "NAR" that talks about the current housing market and mortgage interest rates.

The 30-year fixed-rate mortgage has hovered in the mid- to upper-6% range, Home buyers seem to be getting over the shock of mortgage rates in the mid- to upper-6% range. The 30-year fixed-rate mortgage averaged 6.72% this week, Freddie Mac reports. Despite the Federal Reserve’s recent rate cuts, that average has held steady.

Still, existing-home sales in November were up about 6% year over year, NAR reported Thursday. “Consumers may no longer be expecting the 3% to 4% mortgage rates from the COVID days,” Lawrence Yun, chief economist of the National Association of REALTORS®, said in a conference call Thursday announcing the latest uptick in existing-home sales. “With mortgage rates mostly stable … more homes available for sale … and job creation up, this is pushing home sales higher.”

Sam Khater, Freddie Mac’s chief economist, points out that rates have stayed in the 6% to 7% range for the past 12 months. “Home buyers are slowly digesting these higher rates and are gradually willing to move forward with buying a home,” he says.

“Consumers are getting used to the new normal,” Yun agrees, especially considering that the 50-year rate average is 7.7%.

But What About the Fed Cutting Rates?

The Federal Reserve voted on Wednesday to lower its short-term, benchmark interest rate by another quarter point, or 25 basis points—its third consecutive rate cut since September. The Fed also signaled that more rate cuts are likely in 2025.

However, mortgage rates have largely refused to budge as the Fed has cut rates, Yun says. The Fed’s interest rate is not directly tied to mortgage rates, which mostly follow Treasury yields.

NAR predicts that mortgage rates will average 6% for 2025, although Yun has said the trajectory of rates will greatly depend on inflation, the federal deficit and other economic pressures.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

766 S 47th Place, Springfield, OR 

Price: $749,900    Beds: 4    Baths: 2.5    Sq Ft: 2840

Nestled on a private 3/4-acre lot with filtered views, this tastefully updated 4-bedroom home offers a perfect setup for an extended family. The main level primary suite has a large walk-in closet, double sinks, new walk-in shower and backyard acces... View this property >> 

 

AND HERE'S YOUR MONDAY MORNING COFFEE!!