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December 15, 2023
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December 15, 2023
What an Amazing Week for Mortgage Rates!
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What an amazing week for mortgage rates! Thanks to consistently positive inflation data, rates have now dipped below 7% for the first time since July.
Rates have now dropped 1.4% in less than 60 days from a high of 8.03% to the current rate of 6.64%, as reported by Mortgage News Daily. Mortgage News Daily is an invaluable online resource for you and your buyers to keep track of rates.
Remember: A drop in mortgage rates of 1% can bring in anywhere from 3.5 to 5 million potential homebuyers back into the marketplace. Certainly not all will buy - and that's a national figure - but there will definitely be more buyers in the market competing for the low inventory. That will likely lead to higher home prices. It's important for you to get your current buyers who are waiting for rates to drop - because they just dropped - to get out there now before other potential buyers grasp the reduction in rates.
What drove the interest rates down this week? The catalyst behind this week's decline in interest rates were the Consumer Price Index (CPI) and the Producer Price Index (PPI), both key indicators of inflation. They showed that there was a continual drop in inflation. Adding to this, the Federal Reserve concluded its final meeting of the year, opting to maintain the federal funds rate, keeping that the same until next year when they'll look at it again.
Fed Chair Jerome Powell, in a post-meeting statement, also hinted at potential rate cuts in the upcoming year, expressing satisfaction with the impact of current monetary policy on slowing down the economy and reducing inflation.
For context, a lot of people get the federal funds rate confused with mortgage rates. The federal funds rate is established by the government to guide the economy. It is the overnight rate that they charge to banks. Mortgage rates are market based, which means they can move in anticipation of what the Fed's future actions are going. We believe that mortgage rates will continue to drop.
In summary, the past two weeks have been exceptionally positive as we close out 2023, potentially setting the stage for a more dynamic real estate market in 2024. We all hope for that!
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The information contained is the viewpoint of the presenter(s). Individuals should consult their own financial representative.
Estimated Mortgage Payment is for exemplary purposes only. Contact a licensed loan officer for exact numbers and APR. Additional rates and terms may apply and are subject to change without notice. Loan scenario assumes a purchase price of Zillow's list price and a 10% down payment. Points and fees not included. Property tax, homeowners insurance, mortgage insurance, and HOA fees are approximate and may vary. Other fees may apply. Product displayed is a conventional 30-year fixed rate mortgage using the current average rate as shown on Mortgage News Daily (mortgagenewsdaily.com).
Estimated Qualifying Income assumes a homebuyer has a FICO score above 740, no other credit debt, and a debt-to-income (DTI) ratio of 43%.
For exact numbers and APR or to run a loan scenario based on your own credit and income, contact our office at (858) 259-8700.
Rate Source: Mortgage News Daily. Rates displayed are approximate, subject to change, and do not necessarily reflect rates available to you. MND’s methods involve an objective component based on lenders' raw prices as well as a subjective impression from their network of originators. For more information about how these rates are calculated, visit www.mortgagenewsdaily.com/mortgage-rates/about.
Mortgage News Daily (MND) is a trademark of Brown House Media, Inc. Zillow is a trademark of Zillow, Inc. CrossCountry Mortgage has not been authorized, sponsored, or otherwise approved by Brown House Media, Inc. or Zillow, Inc.
Equal Housing Opportunity. All loans subject to underwriting approval. Certain restrictions apply. Call (858) 259-8700 for details. All borrowers must meet minimum credit score, loan-to-value, debt-to-income, and other requirements to qualify for any mortgage program. CrossCountry Mortgage, LLC is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the federal government. CrossCountry Mortgage, LLC is not affiliated with or acting on behalf of or at the direction of the Veteran Affairs Office or any government agency. Certificate of Eligibility required for VA loans. By refinancing, the existing loan total finance charges may be higher over the life of the loan.
