Christmas Comes Early:
Rates Dip to Biggest 2-Day Drop in Decades
Just when you think all the surprises are gone in 2023, Mortgage Rates began plummeting mid-week to one of the biggest 2-day rate drops in decades. That means that some air is out of the balloon for buyers and sellers—and for buyers, in particular, it brings not only relief but opportunity.
30-Year Fixed Mortgage Rates
(October 1 – December 15, 2023)
Source: Mortgage News Daily
A New Trend?
According to Mortgage News Daily, “rates have dropped more in this 45-day window than any other 45-day window we’ve measured.” (That’s at least all the way back to 2007 when they started keeping records of rate highs and lows.) Whatever the case, it’s welcomed news to have rates settle under 7% for the first time since August—and more telling, it’s the seventh straight week that rates have come down.
What Does It All Mean?
No one knows for sure, but with the Fed recently suggesting that interest rates could be cut in 2024, mortgage rates should continue to fall or at least hover in the 6% range for a while. This, of course, is great news for buyers who have suffered from lingering paralysis due to rates that have ticked upward for most of the year. Activity should increase, and sellers can breathe a sigh of relief, too, as they don’t have to cut pricing. Everyone wins for the time being. Now is the time to get with your Realtor and lender to stay abreast of the latest daily developments. Opportunities will undoubtedly abound. Make sure you are ready to pull the trigger when the time is right.
What Have We Learned In 2023?
Buyer Demand Has Been Resilient
And this was even before the recent drop when rates were well above 7%. Buyer demand has remained robust, for the most part, as appropriately priced homes moved quickly in the past 12 months. And even though we enter the festivity (chaos?) of the holidays—a typically slow time for real estate transactions—strategic buyers can find some great opportunities, especially with houses that have been sitting for weeks and months. Now’s the time!
“Buyers and sellers remain active in every economic environment, including when mortgage rates are high. Buyers determined to find a home they love will continue visiting homes with their agents, and as we mentioned previously, some sellers are reducing prices, which presents an opportunity for those buyers.”
~Mike Lane, Vice President, ShowingTime
Inventory Trending Up
Although active listings are still below pre-pandemic levels, they have been ticking up recently. That should certainly continue as sellers, too, will want to take advantage of these lower mortgage rates. This all points to a more balanced market in 2024.
New Listings Stabilizing
Home Values Stay Strong
This was a big concern for 2023, but as we’ve seen, home values have proved quite resilient across the country for the most part. This suggests a return to normal appreciation rates for the coming year. At the very least, the fears of falling prices seem to have been averted for the foreseeable future.
Percent Change in Home Values
Peering into 2024
Things are looking up, suffice it to say. As we have said in the past few months, the market has favored buyers. That should continue for the first part of 2024, but don’t expect it to last forever. In fact, this may indeed be the last time for a while that buyers have the advantage, as the market should reflect a truer balance for both buyers and sellers. One thing is becoming clearer: 2024 is shaping up to be much more dynamic and favorable than the previous 12 months. And this should be music to the ears of everyone: buyers, sellers, and investors.