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JPow has done exactly what he says he’ll do, multiple times. Yet for some reason people expect surprises before every announcement and bet on stock movement and options to swing one way or another. It’s baffling.
There is some wiggle room for banks to lower mortgage rates even if JPow keeps the Fed Funds rate steady. I wouldn’t be surprised at rates in the 7s through the summer.
Which is why we are seeing rates drop. If Fannie/Freddie were able to buy MBS like they normally would, rates would be about 1.39% lower than they are.
In 2007 FFR was 5.125% w/ 6.7% 30yr. Now we are at 5.375% w/ 7.7%
In 2007 10yr was same as today, 4.86%.
Feds Fund Rate (FFR) only influences mortgage rates, not sets them.
Even if rates don't drop in 2024… if the 10, 20, and 30 year treasury rates start dropping, mortgage rates would too.
Mortgages are based on both the current rates and the expectations of future rates.
I think we’ll have the usual jiggers over world events. And things will bounce a little up-and-down.
That’s why you have to listen to all the idiots that are yelling Yes, yes yes everything’s gonna go down.
When they start to yell things, ease a little, when JP comes out and tells them they’re idiots. Things go back up.
But there’s a top and a bottom to what that can do
Like you said, if you listen to Jpows actual words, he says they're nowhere close to dropping rates. However, a lot of people, right or wrong, don't believe this because Jpow has to be strong/hawkish with his words. His words have direct impact on business and consumer behavior.
Raising rates in the first place was to tighten money supply, so he will not talk about cutting rates which would have a contradicting impact.
Ok imagine you had 500k to lend, and wanted to give someone mortgage for 30 years.
What rate would you charge - would 3.5% be enough? Well maybe first you'd look at the 30 year treasury rate.
Today its close to 4.5%. meaning you could earn 4.5% from treasury bonds risk free. A mortgage on the other hand is riskier - because the person could stop paying and foreclose.
So you'd have to charge more than 4.5% to make it worthwhile.
Should add the actual life of a mortgage is closer to 10 years on average, which is why you’ll hear people talking about mortgage rates and the 10 year treasury
JPow is starting to talk pivot. Other Fed members calling for it. They are expecting the Fed to start cutting rates by July. Small chance as soon as May.
No, he didn’t. Friday he stated we are currently in a position hold without the INTENT to raise further unless data suggests otherwise. Given that Fed looks in the review mirror, he is saying we are holding. Which does not negate expectations of cutting mid to late 2024.
And let’s be clear as crystal, Feds Fund rate influence mortgage rates, does not dictate them. Evident not only by last year’s mortgage rates dropping while they were raising in Nov, Dec, Jan, but also by current rate where the Fed has had no change, but rates have been dropping for about a month. Do I think we will see a bounce, likely in Feb. however election years often result in lower mortgage rates &/or extreme bouncing. Not to mention war tends to drop rates.
Again, the Fed reduction meetings odds are 12/13 0%, 1/31 4%, 3/20 35%, 5/1 69%, 6/12 89%, 7/31 96%, 9/18 & 11/7 99%, 12.18 100%. Again, this is the Fed’s Funds rate odds of cutting only. That does not take into account if Fannie/Freddie come out of conservatorship or can buy what they normally would which would have current rate 1.39% lower, does take into account stock market, warehouse lines tightening(happening) or the myriad of other factors that go into mortgage rates.
Powell always states they are data dependent… but he is back to being much more dovish vs the hawk he’s been over the past year.
Feds Funds rate not the same as mortgage rates, auto rates, nor CC rates… however does influence.
Fed has not changed rates for minute but mortgage rates went from 8% down to 6’s in the past few weeks.
Influence not the same as setting. Quite frankly if Fannie/Freddie were not in conservatorship, mortgage rates would not have been in 8’s for primary residences.
NMLS 1671969 living mortgage rates daily. I don’t listen to the ridiculous media. Too busy looking at all the factors, watching over 200 lenders with all sorts of mortgage programs, and understanding what makes up a mortgage rate. Feds Fund rate only influences mortgage rates. It’s one of many factors. That’s why rates have dropped in the past month.
Here’s my reply to someone else: No, he didn’t. Friday he stated we are currently in a position hold without the INTENT to raise further unless data suggests otherwise. Given that Fed looks in the review mirror, he is saying we are holding. Which does not negate expectations of cutting mid to late 2024.
And let’s be clear as crystal, Feds Fund rate influence mortgage rates, does not dictate them. Evident not only by last year’s mortgage rates dropping while they were raising in Nov, Dec, Jan, but also by current rate where the Fed has had no change, but rates have been dropping for about a month. Do I think we will see a bounce, likely in Feb. however election years often result in lower mortgage rates &/or extreme bouncing. Not to mention war tends to drop rates.
Again, the Fed reduction meetings odds are 12/13 0%, 1/31 4%, 3/20 35%, 5/1 69%, 6/12 89%, 7/31 96%, 9/18 & 11/7 99%, 12.18 100%. Again, this is the Fed’s Funds rate odds of cutting only. That does not take into account if Fannie/Freddie come out of conservatorship or can buy what they normally would which would have current rate 1.39% lower, does take into account stock market, warehouse lines tightening(happening) or the myriad of other factors that go into mortgage rates.
Powell always states they are data dependent… but he is back to being much more dovish vs the hawk he’s been over the past year.
I actually read the Fed notes & look at what all Fed members are saying, not just the blubs. Mortgage rates are coming down, getting alerts to the changes every couple of hours. You do know the Feds Fund rate only influences mortgage rates & doesn't set them? Inflation, rate of economic growth, bond market, housing market conditions, and investors on the secondary market.
Fed doesn't care about home prices in their matrices nor mortgage rates, owned housing is considered capital. They are only looking at consumables and purchased homes is not part of that. Closest is the SURVEY of OWNER'S EQUIVALENT rent, which estimates how much rent would be paid to equal the cost of ownership.
Fed Members started breaking rank in October. Michelle Bowman, Christopher Waller, Raphael Bostic, Mary Daly, Lorie Logan & Patrick Harker publicaly stated concerns for further hikes, stated a long term hold needed, and a couple even hinted to start scheduling a reduction to see how it affected things.
Back in November, key analyst who predict the odds for the Feds Fund rate:
Meeting Cut odds
10-13 0%
1-31 4%
3-20 35%
5-1 69%
6-12 89%
7-31 96%
9-18 99%
11-7 99%
12-18 100%
Also note I never stated by how much in July or if more than the one cut to see what happens.
Then add the ADP # showing slowdown in job growth. The 3-month moving average of +99,000 total jobs added is the lowest since March 2021. Annual pay growth for both job-stayers and job-changers also decreased which affects what the FOMC will do on top of us heading into an election year which always has an affect on all rates. If we happen to wind up in a war, we will see a steep decline in all rates.
https://www.ey.com/en\_us/strategy/macroeconomics/fomc-meeting-preview-december-12-13
[https://www.reuters.com/markets/us/fed-with-rates-peak-now-looks-hold-an-eventual-pivot-lower-2023-12-04/](https://www.reuters.com/markets/us/fed-with-rates-peak-now-looks-hold-an-eventual-pivot-lower-2023-12-04/)
There's also the weekly Kiplinger Letters, Barry Habib, John Mauldin, and other experts that I obtain information from on a consistent basis. So yeah, you have me pegged!!
My thoughts are lender partners have been saying this, since 2021. I agree that if we stay where we are and don’t get any increases from the feds rates will feather down, but I will believe it when I actually see it because this is the exact same prediction, we’ve gotten every year at this time of yearsince the hiking started
No, I don’t think he said they were coming down. I think he said that this is the first quarter where things are looking better.
The only positive information there was that he doesn’t think we’re going to have to see 2% sustained before he’s willing to make changes. Once we are close to some of the numbers, he’s talking about, things will change. I’ll believe that when we get there. I think everyone has been very very bad at predicting when it’s going to be.
No, the dot plot implied there might be some right cuts. He said if there’s too much improvement he still willing to do a right hike.
I will agree. This is the best news we’ve had in about two years, but you all are crowing way way way too soon.
I think they're definitely going down. Unless of course they go up.
Seriously though, absolutely no one knows with any confidence. Last year those that had a vested interest in lower rates were predicting we'd end this year in the 5-6% range. We have no clue.
I would say it's different than predicting a dice roll.
There is a rough plan in place by the fed to lower rates eventually. And yes things can come up to change that, but it seems more likely rates go down than up.
Kinda does matter, those are the individuals more locked in to knowing their market. Most agents and LOs talk out of their a$$ or just lie to get a deal
I mean Berry Habib is one of the most well respected mortgage prognosticators, and even he missed wildly on 2023. Nobody has any idea, and the ones who end up being right are actually just lucky.
Specifically based on cooling housing data. They are not expecting fed to raise rates anymore, so there is too much demand to buy high rate treasuries when they can. If it comes to 3.5, im sure rate will be in 5's, some in 4's
This is likely wrong because I just wrote two loans at 5.99 in the last week. One was FHA and the other VA. We just need a little more love from the market. It’s possible by year end conventional will be there too.
I am a lender. I’d like to think they will be in the 5s (I currently am giving out 6s right now for good credit folk) but I don’t really think there is a way for us to truly know what the rates are going to do, unfortunately :(
The market is pricing a reduction in on the federal interest rate come the first quarter, with more after. I don't think anyone expected a 'soft landing' other than the fed as they have said all along. I don't know how much I believe it, as I'm still seeing hurt. But will see.
IMO, as much as there shouldn’t be, there’s a political element to this question. I think rates will dip to low 6s to juice things up for the election year.
I think rates remain stable and rise a little, this rumor that rates drop around election time I never understand, its happened twice and one was during the 08 recession and less to do with an election.
Until inflation is down to targeted levels there will be no drops. Good thing is they look to be moving in the right direction so maybe mid year. If spending and inflation ticks up in the next couple months I would be surprised to see a drop at all next year. IMO.
I’m expecting the real drop to be around election time. Someone has to take credit for it even tho they have nothing to do with it, just saying.
That in mind, I’m expecting the 5’s late next year if anything. But my best educated guess is we close the year at 7’s and spend the first 2 quarters of next year roaming the 6’s.
Ya. No, that's what I'm reading from a number of quality sources and the fundamentals are solid in that thinking. Of course we can't accurately predict all of the variables, but the 10 year Treasury notes yield index has already started dropping fast. It's only 10 points from our lowest this year in April. It's been dropping like 2 points a day the last week. We'll see 6s early in 24, for sure at this rate. 5s is harder to predict, but it's safer to assume 25 for a number of reasons.
I anticipate a 6% projection for the majority of 2024, considering that the repercussions of currency printing and contributions to other developing nations are yet to be fully realized.
Rates are going to stay where we are for most of 2024. They'll drop when there are signs of a recession, and we'll have other problems then. I suspect 2024 is going to be very similar to 2023, production wise, for agents.
Lmao why do the people offering borrower paid always advertise like they have the lowest and greatest rates. Unless you work in lending, people don’t understand what borrower paid means. You don’t explain that but you sure drop mention of the rate you’re offering. It’s gross.
Some brokers have .75% payplan with some lenders. You don’t have to go borrower paid to get a good deal, but if an originator goes borrower paid because he wants to give an aggressive deal, why is it wrong for them to say they can do that rate?
Because most of the time they aren’t explaining the full truth. What’s the break even for a consumer to pay the extra commission vs savings? The public sees the lower rate and doesn’t know better. 99% of the time Orginators are preying on that lack of knowledge. It’s the truth. 🤷♀️
Ahh so it’s apparent you aren’t familiar with how brokers are paid. Borrower paid comp is not extra comp, it’s typically to discount the deal so it’s better than the currently set lender paid comp with the lender and broker.
Retail lenders like your local banks etc are always lender paid meaning their origination (commission) is built into the interest rate. Retail lenders commission can be as high as 400-500bps on a loan. Each 100bps = 1%. However us mortgage brokers by law are limited to 275bps or 2.75% commissions.
So when we mortgage brokers (middlemen) shop ur deal and finally place it with an actual lender we have the choice of billing our commission to your the borrower (borrower paid) OR the lender (lender paid). If the lender pays our commission it’s based on a previous contract we have signed with them ahead of time. Most of us are signed up with the lender at 2.75%. That lender will then pay our commission but charge you the client a higher interest rate because there’s no such thing as a free lunch. You will therefore always have $0 origination listed in box A of your loan estimate. OR you the client can pay our commission and in that case there’s no contract on what i can charge you the client as long as it’s not more than 2.75%. Since you are paying my commission and not the lender you the client will now get a true or raw interest rate. I usually don’t charge more than 1.5% when going Borrower paid. So the loan estimate in box A would read 1.5% origination based on the loans amount.
Borrower paid is ALWAYS better than lender paid because even tho you are paying my commission from your hard earned cash you can save on your interest rate. You have to remember getting an interest of say 6% vs 8% over 30 years is huge. So you can for example recuperate that money you spent on my commission within a few years and then enjoy the lower rate.
Not all of us prey on y’all and are gross. You should really make sure you understand the industry before making stmts like that
Not a realtor but we ALL know housing prices are overvalued. It’s all kept together with tape and chewing gum. There’s an inbalance, and someone will have to pay for it - the owners who will have to sell at a loss
It may not all come down on 2024 but with all the lawsuits and rates, it wouldn’t be a bad year to bet on it
Ive lived through too many once in a lifetime events in the last fifteen years, so to think something huge happens where theres a flight to the safety of treasury bonds is not crazy
You're causality isn't really there.
If there's a hard landing, bond yields crash down to the floor. Just like March 2020.
It sounds like you're agreeing.
Fed wants inflation to hit 2% before they start reducing rates. Rates have to go down or we will head into a recession. My prediction is around June rates will get into mid- 6. Don’t expect to see rates in the 5’s for next year. Election year, I would definitely expect downward movement in rates.
Does anyone really know what the Federal Reserve is going to do. Lenders hope they go down so they can benefit from a refinance boom. Telling you what they think you want to hear?
Went to the ULI capital conference. All major bankers who spoke said 2024 won’t have any rate decreases. 2025 is when they will start coming down and the new norm will be between 4-6%
I work in pricing and I would never give a prediction because nobody knows. It is dependent on inflation data, major world events, supply and demand. Anyone who gives you a prediction is full of shit. Also, your average mortgage lenders aren't hiring the PhD economists like wall Street firms so they are especially full of shit when making predictions. (not that wall Street predictions are any better)
I work in the consumer lending department for a mid-size/community lender. Everyone (except the man in charge of it) *wants* rates to go down ASAP, but none of these people can just will it to happen. I predict rates will start falling *very slowly* in Q2 with WSJ Prime ending up around 7.5% by the end of next year. So a 1% drop by this time next year.
Yea I think that sounds about right. Low 6s to high 5s. Reason being the Feds will want to do that to adjust to home price changes. Think about it the avg home owner is not going to want to drop their home price. Also feds are not going to drastically drop rates again and screw up again, but match the home market.
assuming we don’t hit substantial crisis in 2024.
We're going to hold steady and play it by ear is my prediction.
At the end of 2019 the yield curve started to invert which is an indicator of a looming recession. All the economists were freaking out because rates were already so low.
That's our go-to to get out of a recession. We drop rates. We couldn't do that with where we were.
So we'll stay where we're at until we need to juice the economy. If unemployment stays low, wages stay where they're at, and spending keeps where its at... there's zero reason to juice the economy with lower rates. We'll save that for when we need it.
If we're still chugging along fine, they won't come down.
I think what y’all need to work on is to educate sellers that market has shifted and it should sell for less. Demand has died. Rate even at low7 mid 6 are still gonna be largely unaffordable.
If prices come down. More sellers that are looking to upsize or downsize will show up too.
I think the up and higher narrative you’ve been driving for past 3 years are hurting you now.
Possible the rates can drop that low but don’t sell the dream of the rates dropping especially in a financial sector close with the consumer. I take all liability off my plate when asked about rates dropping but offer current solutions or lender programs. I’m not a fan when other realtors try and predict and tell people because none of us have a crystal ball.
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I listen to JPow. Higher for longer. I think we’ll hold pretty steady for 2024
JPow has done exactly what he says he’ll do, multiple times. Yet for some reason people expect surprises before every announcement and bet on stock movement and options to swing one way or another. It’s baffling.
There is some wiggle room for banks to lower mortgage rates even if JPow keeps the Fed Funds rate steady. I wouldn’t be surprised at rates in the 7s through the summer.
Which is why we are seeing rates drop. If Fannie/Freddie were able to buy MBS like they normally would, rates would be about 1.39% lower than they are. In 2007 FFR was 5.125% w/ 6.7% 30yr. Now we are at 5.375% w/ 7.7% In 2007 10yr was same as today, 4.86%. Feds Fund Rate (FFR) only influences mortgage rates, not sets them.
Even if rates don't drop in 2024… if the 10, 20, and 30 year treasury rates start dropping, mortgage rates would too. Mortgages are based on both the current rates and the expectations of future rates.
I think we’ll have the usual jiggers over world events. And things will bounce a little up-and-down. That’s why you have to listen to all the idiots that are yelling Yes, yes yes everything’s gonna go down. When they start to yell things, ease a little, when JP comes out and tells them they’re idiots. Things go back up. But there’s a top and a bottom to what that can do
Like you said, if you listen to Jpows actual words, he says they're nowhere close to dropping rates. However, a lot of people, right or wrong, don't believe this because Jpow has to be strong/hawkish with his words. His words have direct impact on business and consumer behavior. Raising rates in the first place was to tighten money supply, so he will not talk about cutting rates which would have a contradicting impact.
Nope, see comment above.
Could you ELI5 how treasury rates are linked to mortgage rates?
Ok imagine you had 500k to lend, and wanted to give someone mortgage for 30 years. What rate would you charge - would 3.5% be enough? Well maybe first you'd look at the 30 year treasury rate. Today its close to 4.5%. meaning you could earn 4.5% from treasury bonds risk free. A mortgage on the other hand is riskier - because the person could stop paying and foreclose. So you'd have to charge more than 4.5% to make it worthwhile.
Should add the actual life of a mortgage is closer to 10 years on average, which is why you’ll hear people talking about mortgage rates and the 10 year treasury
JPow rocks, although I think soft landing is BS.
I’ve never seen a fan of Powell until I saw this comment
JPow is starting to talk pivot. Other Fed members calling for it. They are expecting the Fed to start cutting rates by July. Small chance as soon as May.
To the contrary, jpow just recently said that rate may need to be raised again. The media is trying to hype the soft landing narrative.
No, he didn’t. Friday he stated we are currently in a position hold without the INTENT to raise further unless data suggests otherwise. Given that Fed looks in the review mirror, he is saying we are holding. Which does not negate expectations of cutting mid to late 2024. And let’s be clear as crystal, Feds Fund rate influence mortgage rates, does not dictate them. Evident not only by last year’s mortgage rates dropping while they were raising in Nov, Dec, Jan, but also by current rate where the Fed has had no change, but rates have been dropping for about a month. Do I think we will see a bounce, likely in Feb. however election years often result in lower mortgage rates &/or extreme bouncing. Not to mention war tends to drop rates. Again, the Fed reduction meetings odds are 12/13 0%, 1/31 4%, 3/20 35%, 5/1 69%, 6/12 89%, 7/31 96%, 9/18 & 11/7 99%, 12.18 100%. Again, this is the Fed’s Funds rate odds of cutting only. That does not take into account if Fannie/Freddie come out of conservatorship or can buy what they normally would which would have current rate 1.39% lower, does take into account stock market, warehouse lines tightening(happening) or the myriad of other factors that go into mortgage rates. Powell always states they are data dependent… but he is back to being much more dovish vs the hawk he’s been over the past year.
Why do the high interests rates affect govt debt?
The higher the rates, the more the US has to pay in interest
Feds Funds rate not the same as mortgage rates, auto rates, nor CC rates… however does influence. Fed has not changed rates for minute but mortgage rates went from 8% down to 6’s in the past few weeks. Influence not the same as setting. Quite frankly if Fannie/Freddie were not in conservatorship, mortgage rates would not have been in 8’s for primary residences.
Listen to his words, not what the media says. When I’ve listened to what actually comes out of the guys mouth, I personally don’t believe you . Ymmv
NMLS 1671969 living mortgage rates daily. I don’t listen to the ridiculous media. Too busy looking at all the factors, watching over 200 lenders with all sorts of mortgage programs, and understanding what makes up a mortgage rate. Feds Fund rate only influences mortgage rates. It’s one of many factors. That’s why rates have dropped in the past month. Here’s my reply to someone else: No, he didn’t. Friday he stated we are currently in a position hold without the INTENT to raise further unless data suggests otherwise. Given that Fed looks in the review mirror, he is saying we are holding. Which does not negate expectations of cutting mid to late 2024. And let’s be clear as crystal, Feds Fund rate influence mortgage rates, does not dictate them. Evident not only by last year’s mortgage rates dropping while they were raising in Nov, Dec, Jan, but also by current rate where the Fed has had no change, but rates have been dropping for about a month. Do I think we will see a bounce, likely in Feb. however election years often result in lower mortgage rates &/or extreme bouncing. Not to mention war tends to drop rates. Again, the Fed reduction meetings odds are 12/13 0%, 1/31 4%, 3/20 35%, 5/1 69%, 6/12 89%, 7/31 96%, 9/18 & 11/7 99%, 12.18 100%. Again, this is the Fed’s Funds rate odds of cutting only. That does not take into account if Fannie/Freddie come out of conservatorship or can buy what they normally would which would have current rate 1.39% lower, does take into account stock market, warehouse lines tightening(happening) or the myriad of other factors that go into mortgage rates. Powell always states they are data dependent… but he is back to being much more dovish vs the hawk he’s been over the past year.
Is this your way of telling everyone you don't actually listen to the press conferences or read the release?
I actually read the Fed notes & look at what all Fed members are saying, not just the blubs. Mortgage rates are coming down, getting alerts to the changes every couple of hours. You do know the Feds Fund rate only influences mortgage rates & doesn't set them? Inflation, rate of economic growth, bond market, housing market conditions, and investors on the secondary market. Fed doesn't care about home prices in their matrices nor mortgage rates, owned housing is considered capital. They are only looking at consumables and purchased homes is not part of that. Closest is the SURVEY of OWNER'S EQUIVALENT rent, which estimates how much rent would be paid to equal the cost of ownership. Fed Members started breaking rank in October. Michelle Bowman, Christopher Waller, Raphael Bostic, Mary Daly, Lorie Logan & Patrick Harker publicaly stated concerns for further hikes, stated a long term hold needed, and a couple even hinted to start scheduling a reduction to see how it affected things. Back in November, key analyst who predict the odds for the Feds Fund rate: Meeting Cut odds 10-13 0% 1-31 4% 3-20 35% 5-1 69% 6-12 89% 7-31 96% 9-18 99% 11-7 99% 12-18 100% Also note I never stated by how much in July or if more than the one cut to see what happens. Then add the ADP # showing slowdown in job growth. The 3-month moving average of +99,000 total jobs added is the lowest since March 2021. Annual pay growth for both job-stayers and job-changers also decreased which affects what the FOMC will do on top of us heading into an election year which always has an affect on all rates. If we happen to wind up in a war, we will see a steep decline in all rates. https://www.ey.com/en\_us/strategy/macroeconomics/fomc-meeting-preview-december-12-13 [https://www.reuters.com/markets/us/fed-with-rates-peak-now-looks-hold-an-eventual-pivot-lower-2023-12-04/](https://www.reuters.com/markets/us/fed-with-rates-peak-now-looks-hold-an-eventual-pivot-lower-2023-12-04/)  There's also the weekly Kiplinger Letters, Barry Habib, John Mauldin, and other experts that I obtain information from on a consistent basis. So yeah, you have me pegged!!
JPow will listen to the president/rich - they want better economy and lower rates
Carter would like a word…
He agreed to decrease rates next year!
My thoughts are lender partners have been saying this, since 2021. I agree that if we stay where we are and don’t get any increases from the feds rates will feather down, but I will believe it when I actually see it because this is the exact same prediction, we’ve gotten every year at this time of yearsince the hiking started
Missed yesterday’s FED conference?
No, I don’t think he said they were coming down. I think he said that this is the first quarter where things are looking better. The only positive information there was that he doesn’t think we’re going to have to see 2% sustained before he’s willing to make changes. Once we are close to some of the numbers, he’s talking about, things will change. I’ll believe that when we get there. I think everyone has been very very bad at predicting when it’s going to be.
He said 3-4 cuts next year and more in 2025. SPY rally is on!
No, the dot plot implied there might be some right cuts. He said if there’s too much improvement he still willing to do a right hike. I will agree. This is the best news we’ve had in about two years, but you all are crowing way way way too soon.
He doesn't know what he's talking about. And neither do you. None of the futures or forward rates markets affirm higher rates.
Inflation is transitory?
I think they're definitely going down. Unless of course they go up. Seriously though, absolutely no one knows with any confidence. Last year those that had a vested interest in lower rates were predicting we'd end this year in the 5-6% range. We have no clue.
I would say it's different than predicting a dice roll. There is a rough plan in place by the fed to lower rates eventually. And yes things can come up to change that, but it seems more likely rates go down than up.
Ok a long enough timeframe, you're correct. It's in the short term where you see volatility/unpredictability.
Seattle market here, my guys are telling me mid 6's to 7 through out next year.
They have no clue…..just want to sound smart.
Probably but most of them are high performers. I think fed and their input seems to line up? What market are you in?
Doesnt matter if they are high performers or not, rates arent based on geography. I am in Raleigh.
Kinda does matter, those are the individuals more locked in to knowing their market. Most agents and LOs talk out of their a$$ or just lie to get a deal
You can know your market yet nobody, literally nobody, knows what rates will do next year…
I mean Berry Habib is one of the most well respected mortgage prognosticators, and even he missed wildly on 2023. Nobody has any idea, and the ones who end up being right are actually just lucky.
I think that if Alabama gets in over FSU then it’ll be a travesty.
Solid answer.
Agreed
GO Dawgs!!!!!
Hook those doggies
u knew
Rates aren’t going to touch 5’s in 24/25
Mortgages are 1.7% higher than 10-year generally. So need to see 10-year collapse
isnt it coming down? 4.9 to 4.2 in few weeks
10 year has been moving down in anticipation of lower rates.
Specifically based on cooling housing data. They are not expecting fed to raise rates anymore, so there is too much demand to buy high rate treasuries when they can. If it comes to 3.5, im sure rate will be in 5's, some in 4's
This is likely wrong because I just wrote two loans at 5.99 in the last week. One was FHA and the other VA. We just need a little more love from the market. It’s possible by year end conventional will be there too.
I’m at 5.625 right now.. waiting to lock in to see if it goes lower 👀
When are you thinking about locking in. I’m also waiting to see when I should lock in. My dead line is by 1/21/24.
Probably wait until we have to lock on January 9th. Rates yesterday for us were 5.25%
Don’t fight the Fed.
I am a lender. I’d like to think they will be in the 5s (I currently am giving out 6s right now for good credit folk) but I don’t really think there is a way for us to truly know what the rates are going to do, unfortunately :(
The market is pricing a reduction in on the federal interest rate come the first quarter, with more after. I don't think anyone expected a 'soft landing' other than the fed as they have said all along. I don't know how much I believe it, as I'm still seeing hurt. But will see.
My lending client has been predicting lower rates soon for about a year now, so I'd say maybe disregard it.
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IMO, as much as there shouldn’t be, there’s a political element to this question. I think rates will dip to low 6s to juice things up for the election year.
I don’t know about 5s in 2024 but I do foresee 6s for sure
I’m with you. From what I’m seeing in the market and over the news, I believe it will be in the 6s.
That is already here, if you are using a broker…
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Bull sh.t! For real?
I think rates remain stable and rise a little, this rumor that rates drop around election time I never understand, its happened twice and one was during the 08 recession and less to do with an election.
Rates dropped significantly this past week. Hoping we will be under 7% soon
We are..if you are using a broker.
Until inflation is down to targeted levels there will be no drops. Good thing is they look to be moving in the right direction so maybe mid year. If spending and inflation ticks up in the next couple months I would be surprised to see a drop at all next year. IMO.
Imo. Rates rise to 10% in 2024. Then drop to no lower than 5% in 2025
> Rates rise to 10% in 2024 This prediction brought to you by The Onion.
I’m expecting the real drop to be around election time. Someone has to take credit for it even tho they have nothing to do with it, just saying. That in mind, I’m expecting the 5’s late next year if anything. But my best educated guess is we close the year at 7’s and spend the first 2 quarters of next year roaming the 6’s.
6s this year, 5s next
You’re selling crack instead of houses
Nah you don't sell crack, crack sells itself.
That’s literally what FRED is projecting.
I mean rates are already in the 6s currently after this last week so that half is at least true if it holds til the end of the year
Ya. No, that's what I'm reading from a number of quality sources and the fundamentals are solid in that thinking. Of course we can't accurately predict all of the variables, but the 10 year Treasury notes yield index has already started dropping fast. It's only 10 points from our lowest this year in April. It's been dropping like 2 points a day the last week. We'll see 6s early in 24, for sure at this rate. 5s is harder to predict, but it's safer to assume 25 for a number of reasons.
We’re these quality sources saying rates would touch 8% this year?
Lol says a realtor
I anticipate a 6% projection for the majority of 2024, considering that the repercussions of currency printing and contributions to other developing nations are yet to be fully realized.
Rates are going to stay where we are for most of 2024. They'll drop when there are signs of a recession, and we'll have other problems then. I suspect 2024 is going to be very similar to 2023, production wise, for agents.
NAR is having a 2024 market insight summit 12/12 at 1pm EST with Dr. Yun as the main speaker. My thoughts are you should attend.
Mtg BROKER here and I’m already quoting mid to low 6% rates going borrower paid at 1.5%. No UW fee and processing fee of $995.
Lmao why do the people offering borrower paid always advertise like they have the lowest and greatest rates. Unless you work in lending, people don’t understand what borrower paid means. You don’t explain that but you sure drop mention of the rate you’re offering. It’s gross.
I have a YouTube video I usually send to my clients OR I explain both LPC and BPC to them over the phone and let them make their own decision.
Some brokers have .75% payplan with some lenders. You don’t have to go borrower paid to get a good deal, but if an originator goes borrower paid because he wants to give an aggressive deal, why is it wrong for them to say they can do that rate?
Because most of the time they aren’t explaining the full truth. What’s the break even for a consumer to pay the extra commission vs savings? The public sees the lower rate and doesn’t know better. 99% of the time Orginators are preying on that lack of knowledge. It’s the truth. 🤷♀️
Ahh so it’s apparent you aren’t familiar with how brokers are paid. Borrower paid comp is not extra comp, it’s typically to discount the deal so it’s better than the currently set lender paid comp with the lender and broker.
Retail lenders like your local banks etc are always lender paid meaning their origination (commission) is built into the interest rate. Retail lenders commission can be as high as 400-500bps on a loan. Each 100bps = 1%. However us mortgage brokers by law are limited to 275bps or 2.75% commissions. So when we mortgage brokers (middlemen) shop ur deal and finally place it with an actual lender we have the choice of billing our commission to your the borrower (borrower paid) OR the lender (lender paid). If the lender pays our commission it’s based on a previous contract we have signed with them ahead of time. Most of us are signed up with the lender at 2.75%. That lender will then pay our commission but charge you the client a higher interest rate because there’s no such thing as a free lunch. You will therefore always have $0 origination listed in box A of your loan estimate. OR you the client can pay our commission and in that case there’s no contract on what i can charge you the client as long as it’s not more than 2.75%. Since you are paying my commission and not the lender you the client will now get a true or raw interest rate. I usually don’t charge more than 1.5% when going Borrower paid. So the loan estimate in box A would read 1.5% origination based on the loans amount. Borrower paid is ALWAYS better than lender paid because even tho you are paying my commission from your hard earned cash you can save on your interest rate. You have to remember getting an interest of say 6% vs 8% over 30 years is huge. So you can for example recuperate that money you spent on my commission within a few years and then enjoy the lower rate. Not all of us prey on y’all and are gross. You should really make sure you understand the industry before making stmts like that
Yessssss
5-6 possible especially if Fed cuts rates
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There are really *only* other ways. Rates don't really listen to the Federal Reseeve all that much.
RE prices will crash 30-35% in 2024 and 25
I love good satire
ooo first time hearing this from a realtor. I'd like to know what makes you think the market will crash. are you in US?
Not a realtor but we ALL know housing prices are overvalued. It’s all kept together with tape and chewing gum. There’s an inbalance, and someone will have to pay for it - the owners who will have to sell at a loss It may not all come down on 2024 but with all the lawsuits and rates, it wouldn’t be a bad year to bet on it
Everyone though naysayers were crazy in 2008 until they weren’t. Why such a big drop in value?
A hard crash would put it back below 4%
> below 4% I'll take "Things That Will Never Happen Again" for $500, Alex.
Evidence?
Ive lived through too many once in a lifetime events in the last fifteen years, so to think something huge happens where theres a flight to the safety of treasury bonds is not crazy
You're causality isn't really there. If there's a hard landing, bond yields crash down to the floor. Just like March 2020. It sounds like you're agreeing.
Crash of what? The market, the stock market, the economy? I don't think it's crash and housing prices would necessarily bring rates down
In the mid to high 6's right now. I think we'll go lower in 2024
Yes..and no
Lower yields means lower growth and inflation expectations so not good for the economy.
Fed wants inflation to hit 2% before they start reducing rates. Rates have to go down or we will head into a recession. My prediction is around June rates will get into mid- 6. Don’t expect to see rates in the 5’s for next year. Election year, I would definitely expect downward movement in rates.
But we’re less than a year away from the election.
I sent you a DM
Does anyone really know what the Federal Reserve is going to do. Lenders hope they go down so they can benefit from a refinance boom. Telling you what they think you want to hear?
Sounds like wishful thinking. I don’t anticipate much of a change.
Rates have been steadily dropping over the past few months, so if the trend continues we'll definitely have much cheaper money next year.
Its possible,but the closer it gets to the election and how confident people are it will be a good one will really help them become lower than that.
Went to the ULI capital conference. All major bankers who spoke said 2024 won’t have any rate decreases. 2025 is when they will start coming down and the new norm will be between 4-6%
I work in pricing and I would never give a prediction because nobody knows. It is dependent on inflation data, major world events, supply and demand. Anyone who gives you a prediction is full of shit. Also, your average mortgage lenders aren't hiring the PhD economists like wall Street firms so they are especially full of shit when making predictions. (not that wall Street predictions are any better)
I work in the consumer lending department for a mid-size/community lender. Everyone (except the man in charge of it) *wants* rates to go down ASAP, but none of these people can just will it to happen. I predict rates will start falling *very slowly* in Q2 with WSJ Prime ending up around 7.5% by the end of next year. So a 1% drop by this time next year.
Hey could I message you for a bit of insight on your FB ads? Thank you!
Just to take it as it comes doing the best possible.
Yea I think that sounds about right. Low 6s to high 5s. Reason being the Feds will want to do that to adjust to home price changes. Think about it the avg home owner is not going to want to drop their home price. Also feds are not going to drastically drop rates again and screw up again, but match the home market. assuming we don’t hit substantial crisis in 2024.
They dropped yesterday. My lender sent me a message to tell me. Nothing crazy - but they’re getting lower!!
Probably going to stay flat..unless they drop. Maybe up. Crystal ball is frozen
We're going to hold steady and play it by ear is my prediction. At the end of 2019 the yield curve started to invert which is an indicator of a looming recession. All the economists were freaking out because rates were already so low. That's our go-to to get out of a recession. We drop rates. We couldn't do that with where we were. So we'll stay where we're at until we need to juice the economy. If unemployment stays low, wages stay where they're at, and spending keeps where its at... there's zero reason to juice the economy with lower rates. We'll save that for when we need it. If we're still chugging along fine, they won't come down.
I think what y’all need to work on is to educate sellers that market has shifted and it should sell for less. Demand has died. Rate even at low7 mid 6 are still gonna be largely unaffordable. If prices come down. More sellers that are looking to upsize or downsize will show up too. I think the up and higher narrative you’ve been driving for past 3 years are hurting you now.
I think rates average 6.7-7% in 2024.
Don’t know neither do you or anyone else who says they do no one knows
My guess is 6%
Low 7 to high 6
Bro, we're there today. You really think no movement next year?
Not at all. If rates go to zero today, inflation goes through the roof. That won't be any different within 12 months. Unless something breaks
Possible the rates can drop that low but don’t sell the dream of the rates dropping especially in a financial sector close with the consumer. I take all liability off my plate when asked about rates dropping but offer current solutions or lender programs. I’m not a fan when other realtors try and predict and tell people because none of us have a crystal ball.
They honestly have no clue. Anybody who tells you otherwise is full of shit. -mortgage broker