March 25, 2024
Q1, also known as the first quarter of the year, is ending, and market watchers are reassessing some of their earlier housing market recovery predictions. As Q1 2024 ends, some at Fannie Mae are saying yes, the rates are recovering, but they are moving more slowly than some would like.
At the time of this writing home loans with 30-year fixed rates are at approximately 6.87%. That feels closer to the 7% range than some would like, but the rates do seem to be moving lower.
Multiple factors contribute to the slower-than-hoped-for rate recovery, but none of them indicate that we will experience a shock return of much higher rates.
Fannie Mae has gone on the record with a. revised mortgage rate outlook for 2024. The agency now says rates might hit an average of 6.4% by the end of this year but that the return to those numbers will take time. Why?
Fed Says No To Higher Interest Rates
One factor is the Fed and its decision not to hike mortgage rates further.
One reason for that decision? The overall indications of a United States economy moving into financial recovery. Hand in glove with that decision is the choice not to aggressively slash rates.
This factor, combined with better-than-anticipated inflation numbers and it is easy to see why there might be a slower return to more borrower-friendly home loan interest rates.
Are you feeling the market enthusiasm but still choosing a wait-and-see approach? You are not alone but that’s also a factor that some believe adds a bit of slow-down to that recovery.
Fannie Mae Predicts Says Home Sales May Increase In 2024
Fannie Mae may point to the indicators above in reference to its views about a financial and housing market recovery, but as you might have guessed, some house hunters are doing more than waiting for things to get better.
In fact, more than half of homeowners polled by the agency say 2024 is a good time to try to sell a house. Interest in buying a new home may not be at an all-time high but some predict more competition in the earliest weeks of Q2 and beyond.
What’s driving that notion? Reports of home sales jumping as high as 10% in February is one factor. House hunters may be competing against more experienced home buyers this year and fewer first time borrowers.
What Is Ahead For The Remainder Of 2024
Many believe it’s “anybody’s ball game” with respect to a 2024 housing market recovery. Will it actually happen? Many believe that question is moot as it’s already underway, especially in light of the Fed’s reluctantness to hike rates further. Yes, a recovery seems to be happening.
No, it is not happening as fast as many want, but if the Fannie Mae predictions about rates falling to the mid-6% zone come true, we may see growing interest in the current housing inventory.
