Economic, Housing and Mortgage Market - MArch 2024
ECONOMIC UPDATE
MORTGAGE MARKET
ECONOMIC UPDATE
The U.S. economic outlook remains broadly positive. We continue to expect modest economic growth, albeit at a slower pace than the previous year, resulting in moderating payroll employment growth and a modest uptick in the unemployment rate. While we expect inflation to eventually moderate, in the short run, a growing economy will keep i
The U.S. economic outlook remains broadly positive. We continue to expect modest economic growth, albeit at a slower pace than the previous year, resulting in moderating payroll employment growth and a modest uptick in the unemployment rate. While we expect inflation to eventually moderate, in the short run, a growing economy will keep inflation above the 2% target level. Therefore, we expect the Federal Reserve to not cut rates until the summer at the earliest and potential upside surprises on inflation could push rate cuts out even further. As a result, treasury yields will remain elevated in the near term, keeping mortgage rates elevated. We forecast mortgage rates to stay above 6.5% through this quarter and next.
Learn more: https://www.freddiemac.com/research/forecast/20240320-us-economy-remains-robust#insurance
HOUSING MARKET
MORTGAGE MARKET
ECONOMIC UPDATE
Home reached a new record high in early 2024.
Nationwide, home prices rose 6% in January from a year earlier, according to the latest S&P CoreLogic Case-Shiller Home Price Index released on Tuesday. That was the biggest year-over-year increase since November 2022.
“U.S. home prices continued their drive higher,” Brian D. Luke, head of comm
Home reached a new record high in early 2024.
Nationwide, home prices rose 6% in January from a year earlier, according to the latest S&P CoreLogic Case-Shiller Home Price Index released on Tuesday. That was the biggest year-over-year increase since November 2022.
“U.S. home prices continued their drive higher,” Brian D. Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, said in a statement. “Homeowners most likely saw healthy gains in the last year, no matter what city you were in, or if it was in an expensive or inexpensive neighborhood.”.
Learn more:
https://www.realtor.com/news/real-estate-news/january-home-prices-case-shiller-index/
MORTGAGE MARKET
MORTGAGE MARKET
MORTGAGE MARKET
Mortgage rates surged at a pace seen only one other time since October 2022. The average lender moved up by 0.28%, which is functionally equivalent to the 0.29% seen after the February 2nd jobs report. In fact, today was arguably worse because the Feb 2nd example happened a day after rates hit long-term lows. The implication is that
Mortgage rates surged at a pace seen only one other time since October 2022. The average lender moved up by 0.28%, which is functionally equivalent to the 0.29% seen after the February 2nd jobs report. In fact, today was arguably worse because the Feb 2nd example happened a day after rates hit long-term lows. The implication is that the jump would not have been as big in early Feb if rates weren't undergoing a correction from those lows.
Hair splitting aside, there just aren't many past examples of rates rising more than a quarter point in a day. Before covid, it had happened one other time in the past decade.
Translation: it was a rough day for rates. But why?
We've been rather incessantly focused on the risks associated with today's Consumer Price Index (CPI) in the days and weeks leading up to its release. It ended up exceeding the hype by showing that inflation refuses to head to the lower levels required for a lower interest rate environment. Today is really that simple.
Learn more:
https://www.mortgagenewsdaily.com/markets/mortgage-rates-04102024