Housing Market Update | Week of December 2nd

We’re coming out the other end of the holiday weekend with a pivotal week of data that will likely dictate the likelihood of a rate cut during the Fed’s December meeting. With bond market activity ramping up last week, increased labor market weakness this week could be the key to improved mortgage rates heading into the new year. Last Week's Mortgage Rate Recap Rates Were Steady Last week didn’t see mortgage rates move much, largely due to the markets being closed for Thanksgiving. We got the PCE report, which is the Fed’s favorite measure of inflation, on Wednesday. The figures came in as expected, with headline and core inflation rising to 2.3% and 2.8% respectively. This saw a slight bond market rally which could be helpful for mortgage rates with the right data this week. This Week's Mortgage Rate Forecast Rates Could Be Volatile We have a busy week ahead with 4 pivotal jobs reports coming between Tuesday and Friday. The data that we get will largely dictate whether the Fed cuts rates during its December 18 meeting and the general direction of the Bond market and interest rates heading into 2025. For rates to drop in the weeks ahead, we need to see unemployment rise, wages fall, and lower-than-expected job creation. With different reports of varying importance coming every day this week, let’s make sure to stay in touch so I can help you navigate potential volatility. In case you missed it, Fannie Mae and Freddie Mac have expanded appraisal waiver guidelines rolling out at the start of 2025. The updates mean buyers can qualify for waivers with loans up to 90% loan-to-value (LTV), and new inspection-based waivers will push that threshold to 97%. If our borrowers put down as little as 3%, they could save beaucoup bucks. Read this to learn more and share this value with our borrowers.

Last week was a wild one for mortgage rates. Although the Federal Reserve announced that they would not be cutting the Federal Funds rate in their May meeting, they did announce that they are tapering their balance sheet reduction. This, combined with weak labor data sprinkled at the end of the week, saw mortgage rates drop at the end of the week. Last Week's Rate Recap: Rates Dropped Slightly Last week, the Federal Reserve held its May meeting. While they decided against cutting rates, Jerome Powell, Fed Chairman, held a dovish stance on the possibility of rate cuts in the future. Last week’s labor reports also showed a softening in the jobs market which caused rates to drop quickly at the end of the week. While it’s still unlikely that we see a rate cut in the Fed’s next meeting, a weakened labor market will be the key to seeing rates drop as the year goes on. This Week's Rate Forecast: Rates Should Stay Steady After the flurry of data and insight from last week’s jobs reports and the Federal Reserve meeting, we have a quieter week ahead without much data for the market to digest. Following a steep drop to the 10-year yield at the end of the week, market analysts will have a careful approach to instill some stability throughout the week. Overall, we should expect to see some steadiness throughout the week. If you want a more comprehensive overview of the market’s reaction to the Federal Reserve meeting and labor data last week, check out a replay of today’s Special-Edition Monday Market Update. Our two hosts offered plenty of insight behind these rate movements and some tactical advice to help you use these pieces of market data to better serve our homebuyers.