Freddie Mac reported This Week in Real Estate a continuous nine-week decline in mortgage interest rates to close 2023, with the 30-year fixed-rate average dropping by nearly 120 basis points from its peak in late October. Additionally, Case-Shiller noted a ninth consecutive month of rising home prices, accelerating at the fastest yearly pace in October. The National Association of Realtors reported flat November pending sales compared to October, with gains in the Northeast, Midwest, and West while the South recorded a modest decline. Below are a few newsworthy events from the final week of 2023 that influence our business: OCTOBER HOME PRICES POST BIGGEST GAIN OF 2023, SAYS S&P CASE-SHILLER. Home prices rose 4.8% nationally in October compared with October 2022, according to the S&P CoreLogic Case-Shiller home price index. That’s a jump from the 4% annual increase in September and marks the strongest annual gain seen in 2023. The strength in home prices came despite a sharp rise in mortgage interest rates in October. The average rate on the 30-year fixed loan crossed 8% on Oct. 19, according to Mortgage News Daily. That was the highest level in more than two decades. Rates, however, dropped steadily through November and more sharply in December, with the 30-year fixed rate now hovering around 6.7%. “Home prices leaned into the highest mortgage rates recorded in this market cycle and continued to push higher,” said Brian Luke, head of commodities, real & digital assets at S&P DJI, in a release. “With mortgage rates easing and the Federal Reserve guiding toward a slightly more accommodative stance, homeowners may be poised to see more appreciation.” “Home price gains in the CoreLogic S&P Case-Shiller Index have increased by 7% since the beginning of the year and are 1% higher than at the peak in 2022, recovering all losses recorded in the second half of 2022,” said Selma Hepp, chief economist at CoreLogic. Read the full story here. PENDING HOME SALES FLAT IN NOVEMBER. Pending home sales were unchanged in November as a decline in sales in the formerly hot South overcame small gains in the Northeast and Midwest. The pending home sales index from the National Association of Realtors, a leading indicator in that it tracks contract signings that usually are in advance of sales a month or two later, rose 0.8% in the Northeast and 0.5% in the Midwest. The South, however, registered a 2.3% decline. Overall, transactions were down 5.2% from a year ago. The pending home sales index from the National Association of Realtors, a leading indicator in that it tracks contract signings that usually are in advance of sales a month or two later, rose 0.8% in the Northeast and 0.5% in the Midwest. The South, however, registered a 2.3% decline. Overall, transactions were down 5.2% from a year ago. As 2023 rolls to an end, economic data is coming in that generally reflects growth in the economy. The next two weeks will bring reports on the labor market and inflation, but those will still be for the last months of 2023. Economists are generally expecting the economy to soften in 2024 but escape a recession or, if one occurs, for it to be a mild one. Read the full story here. MORTGAGE RATES END 2023 WITH 9 STRAIGHT WEEKLY DROPS. Mortgage rates slowed their downward momentum to close out 2023, but still finished the year with nine straight weekly drops, according to Freddie Mac. The average rate of the 30-year fixed mortgage slid down 6 basis points to 6.61% for the weekly period ending December 28 in the final release of Freddie Mac’s Primary Mortgage Market Survey for 2023. Seven days ago, the average came in at 6.67%. Despite a precipitous recent fall, the latest 30-year rate is still 19 basis points higher than the 6.42% average recorded in the final week of 2022. “The rapid descent of mortgage rates over the last two months stabilized a bit this week, but rates continue to trend down,” said Sam Khater, Freddie Mac’s chief economist, in a press release. After coming in at its highest point in 23 years of 7.79% in late October, the 30-year average has tumbled almost 120 basis points in a little over two months, as signs of a cooling economy eased market worries. The interest rate retreat picked up in the final few weeks of the year after the December 2023 meeting of Federal Reserve officials, whose comments pointed to a marked shift in their approach to monetary policy next year. Read the full story here.
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