Hi, I'm RJ Baxter with Clear Path Home Loans. This week I wanted to give you a market update for both housing and interest rates. Talk about some trends that are happening right now and how that may project into the early months of 2024. Now that being said, no one has a crystal ball. No one can predict exactly what's going to happen. But we're starting to see some trends that could continue into 2024. So let's talk about it. So the first thing I wanted to share with you is a chart from Mortgage News daily that tracks 30 year fixed mortgage rates compared to mortgage application data. 30 year fixed rates are the orange line and the blue shaded area is mortgage application data. This is a one year chart from going back to last December of 2022. 

And as you can see, as mortgage rates go up, mortgage applications go down. No surprise, less people can qualify. Less people want to take on those higher rates so they don't apply. And mortgage rates, according to this chart, peaked out at a nationwide average of 7.79 in the week of October 23, 2023. Now that's an average. That's all loan types, all types of homebuyers, all credit profiles, but the average 7.79. And ever since then, it has fallen. And part of the reason why, there's a couple of reasons is first of all, we started getting some weaker economic data in late October, early November. So that's a sign that potentially a recession is coming if that type of data continues. The second thing is we saw lower inflation numbers, and lower inflation leads to lower interest rates historically and vice versa. 

And then the third thing that happened that's really key is in December, at the Federal Reserve's most recent meeting, they announced that they are likely going to lower rates three times in 2024. So this is an easier monetary policy than what they've been communicating up until now during this rate hike period. So the markets really like that. Interest rates have continued to fall since late October, and we're now at a nationwide average of 6.67. And as you can see from the shaded area, mortgage applications have started to rise. That means more buyers on the market, more people looking at homes and inventory. That means homes that are available for sale have continued to be low. I pulled up this infographic. This is from the Denver Metro association of Realtors. And this is specific to the Denver market. 

But as you can see, active listings year over year, ten point 67% lower than last year. And last year was not a lot of listings. So that means more buyers competing for less homes. And it's logical that if this continues and rates continue to go down, there's going to be even more demand for those few homes that are for sale and make it even harder to get a good deal on a house. It's projecting out that we could see a situation whereby spring homes are getting bid up in price again, like we saw during the pandemic. Now, it's almost certainly not going to be as bad as it was then, but that being said, there are still sellers willing to negotiate. Right now. The market is not nearly as competitive as it was a couple of years ago. 

So now is a really good time to look because there's also not as many people looking during the holidays. So I wanted to share that with you, because if in fact the economy continues to show weakness and the Fed does in fact cut rates, and they're right now projecting, forecasters are projecting an 80% chance that they cut rates in March this spring and rates continue down, more and more buyers are going to start coming back into the market and we're going to get even more demand. So this is something really important to be aware of and something important to talk to your real estate agent and your lender about moving forward. So I hope that helps you out. My name is RJ Baxter. My information is right here. If you need to reach me, my phone number is here. 

You can text me or call me or shoot me an email. I appreciate you watching this week. Have a happy holiday. And thanks again for watching. Bye. 

RJ Baxter
Owner
Clear Path Home Loans
http://www.cohomesandloans.com
303-670-0137
therjbaxterteam@gmail.com
NMLS #395819
Clear Path NMLS #2564260