2024 was a disappointing year for those looking forward to the Fed’s rate-cutting cycle and what it would do to mortgage rates. A strong economy (and a skittish Fed) pushing rate cuts through September – and then mortgage rates go up!
However, the bond market went ahead The Federal Reserve and before the first cut, mortgage rates are already down nearly two percentage points from their 2023 peak, when they reached 8% in October. Mortgage rates have approached the magical 6% level in various jurisdictions this fall, reviving demand and giving the industry a much-needed but short-lived shot in the arm.
Unfortunately, the election brought a new set of variables that affected mortgage rates and we are now ending the year with mortgage rates around 7%. Is it bad? No. Good? And no.
“I understand the frustration with the mortgage rates in 2024,” said lead analyst Logan Mohtashami. “Many people believed that a housing market below 6% was coming, but the bond market is holding on to a significant level, like Hodor from Game of Thrones holding the door. As a result, another year has passed without mortgage rates falling below 6%.
The HousingWire newsroom writes about mortgage rates several times a week (you can find all those stories here) and we publish Mohtashami’s Housing Market Tracker every Saturday with weekly updates on the outlook for the 10-year mortgage/payment ratio, housing inventory, sales, new . inventory, pending contracts and more.
“The loan rates remained in the range I expected this year,” said Mohtashami. “When economic and labor data weakens, bond yields and mortgage rates fall. Conversely, when economic and labor data improve, rates rise. What we saw in 2024 was similar to 2023: mortgage rates fell when economic data weakened. For these rates to remain low for long, the economy must continue to underperform or mortgage spreads must improve back to normal.”
Below are some of our top home price stories, starting in September, that show what real estate professionals have been up to this year:
Where will house prices go in 2025? Check out HousingWire’s 2025 Housing Market Forecast and register for the Housing Economics Conference on Feb. 26, where the best real estate economists will break it all down.
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