This week, mortgage rates decreased to their lowest level in over a month. Despite just a modest drop in rates, consumers clearly have responded as purchase demand has noticeably improved. The responsiveness of prospective homebuyers to even small changes in rates illustrates that affordability headwinds persist. Freddie Mac, 12/5/24

3 angles on mortgage interest rates: Weekly, Daily, Jumbo Loans

Stock markets (and bitcoin) continue to head into the stratosphere, regularly hitting new historic highs – clearly a major dynamic in higher-price home sales and all-cash buyers.

Inflation ticked up slightly in October. The November reading will be released on 12/11/24. It is unclear whether the Fed will reduce their benchmark rate again this month.

According to NAR Chief Economist Lawrence Yun, “Homebuying momentum is building after nearly two years of suppressed home sales. Even with mortgage rates modestly rising despite the Federal Reserve’s decision to cut the short-term interbank lending rate in September, continuous job additions and more housing inventory are bringing more consumers to the market.”

Per Freddie Mac (FHLMC) research report:

“In the November Economic, Housing and Mortgage Market Outlook, we forecast the mortgage market to improve in 2025, based on a decline in mortgage rates throughout the year. That should loosen some of the rate lock-in effect for existing homeowners and offer more inventory in the market, resulting in slightly higher home sales. It should also boost refinance origination volumes. We expect house prices to continue to grow, although at a slower pace. Our outlook has not been adjusted to reflect any impact of the U.S. election.” FHLMC Research, 12/3/24, Link to the full FHLMC research report

As is the typical seasonal trend, new-listing and accepted-offer activity dropped substantially in November and will almost certainly plummet in December.