This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.
Market Commentary:
For the week of Sep 6th to Sep 12th, interest rates decreased. "Mortgage rates have fallen more than half a percent over the last six weeks and are at their lowest level since February 2023," said Sam Khater, Freddie Mac's Chief Economist.
The Fed's policymakers have signaled that they're increasingly confident that inflation is falling back to their 2% target and are now shifting their focus to supporting the job market, which is steadily cooling. As a result, they are poised to begin cutting their benchmark interest rate next week from its 23-year high in hopes of bolstering growth and hiring. A modest quarter-point cut is widely expected.
The pickup in core inflation makes it unlikely that the Fed would consider cutting its key rate by a larger-than-usual half-point next week, as some Wall Street traders had hoped. Still, over time, a series of Fed rate cuts should reduce the cost of borrowing across the economy, including for mortgages, auto loans and credit cards.
Fed Watch: Target rate (in bps) possibilities, according to the CME Group (as of 9/12/2024 – 12:30 PM EST):
Market Review: Optimal Blue's Production Metrics:
Rent is eating up a greater share of tenants' income in almost every state:
Home Buyers Are Looking for Amenity Loaded Kitchens and Bathrooms:
Rising Homeownership Rate for Multigenerational Households:
Labor Limps
Employers added a decent 142,000 net jobs in August, but July was revised down from 114,000 to 89,000 and June from 179,000 to 118,000. Four of the five weakest monthly readings since 12/20 have come during the past five months. The August number will also likely be revised down. Weakening is obvious. The Fed should cut 50bps on 9/18/24 but will do 25bps because they remain oblivious to the obvious.
- Elliot Eisenberg, Ph.D. , Economist
News You Can Use
- Weekly mortgage demand stalls, even though rates drop to lowest since April 2023
- Housing affordability has improved despite latest Case-Shiller data, says Morgan Stanley's Jim Egan
- Harris' housing policy might have a path to be enacted due to tax credits, says TD Cowen's Seiberg
- Housing Market Trends 2024: Current Patterns and Predictions
- Home Price Gains Continue to Slow
- US Economy Expands at Revised 3% Rate on Resilient Consumer
*Communication is intended for Industry Professionals only and not intended for Consumer Distribution
Interest rate and annual percentage rate (APR) are based on current market conditions as of 09/12/2024, for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Prosperity Home Mortgage, LLC. Not available in all states. Rate is as of 09 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac's economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac's business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an "as is" basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.
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