May 15, 2024 Market Update

For 2024, the outlook on mortgage rates appears more static or inclined to increase, contrasting with earlier predictions of a decrease. This change is driven by various economic indicators and Federal Reserve policies.

Our Thoughts

Our outlook for rates is currently this; for the last two years we’ve seen increased rates in the fall. We believe there may be small ( +-.25% ) fluctuations as there always are but the market tends to repeat wihtout major economic changes. There does not seem to be any influences on rates going down at the moment.

Mortgage Rate Trends

According to Fannie Mae’s Economic and Strategic Research Group, mortgage rates were expected to decline throughout 2024, potentially dipping below 6% by year-end. This forecast is buoyed by a shift towards a more balanced housing market amidst economic uncertainties.

We personally do not believe there will be a dip in the Rates over the coming months.

Impact on Housing Supply and Demand

The U.S. housing market is seeing an interesting interplay of supply and demand dynamics. While single-family starts remain robust, multifamily starts are predicted to decline. However, completions in the multifamily sector could increase inventory and potentially lower rents in this segment.

Regional Market Variations

The national figures mask significant regional disparities. Areas that experienced rapid pandemic-related growth, such as Tampa and Austin, continue to see active housing markets. Conversely, more expensive metropolitan areas are witnessing slower recovery.

Future Outlook

Economic indicators suggest that while the housing market may face challenges, such as potential rate hikes later in the year, overall conditions could improve, fostering both new home sales and existing home sales recovery.