Good Monday Morning!

After years of historically low mortgage interest rates, the Fed began a systematic increase in rates, which in turn influenced the mortgage market and sent rates soaring. Mortgage rates peaked in the Fall of 2023 before they began to subside in the Winter of 2023. Today, rates have declined significantly, and there are mixed thoughts as to where mortgage rates may be headed in 2024. The following article from NAR gives their opinion on the 2024 mortgage rate situation. Only time will tell, but one thing is most likely for sure, and that is that we most likely won't see a return of 8% mortgage rates in 2024. This is great, but further declines in mortgage rates in 2024 would be even better.

Although the Fed’s rate does not directly impact mortgage rates, it often influences them

Jessica Lautz, deputy chief economist at the National Association of REALTORS®, anticipates mortgage rates to remain in the 6% range for most of the year. “While this is certainly higher than the historic lows seen in 2020 and 2021, this is lower than the historical norm of 7.74%,” Lautz says.

With less volatility in mortgage rates, consumers may feel more confident to resume house hunting. Last fall, mortgage rates surged to nearly 8%, shaking buyer confidence and causing home sales to dip. This week’s 6.63% average translates to about $251 less for a typical monthly mortgage payment compared to fall when rates hit a peak, Lautz says.

Mortgage rates have held relatively stable for nearly two months, which is bringing more buyers back into the housing market, says Sam Khater, Freddie Mac’s chief economist. Further, “the economy continues to outperform due to solid job and income growth, while household formation is increasing at rates above pre-pandemic levels,” he says. “These favorable factors should provide fundamental support to the market in the months ahead.”

Lower mortgage rates are helping to improve housing affordability, adds NAR Chief Economist Lawrence Yun. Pending home sales rose 8.3% in December and are now higher than a year ago, NAR’s latest housing report shows.

Homeowners also may find more incentive to sell. “Many delayed home sellers may be willing to give up 3% to 4% rates as life circumstances have changed, thereby boosting inventory,” Yun says. “Home sales will no doubt rise this year.” NAR is forecasting a 13% increase in existing-home sales compared to 2023. That rising trend is expected to continue into 2025, with another 15.8% uptick, NAR notes.

Have An Awesome Week!

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

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