Let’s dive into the latest scoop on the housing market, and folks, it’s not looking too rosy.
Fannie Mae, the big player in the mortgage game, just dropped a bombshell prediction: the housing market might remain in a slump until at least 2026 unless prices take a nosedive of over 30%. That’s a tough pill to swallow for those dreaming of that idyllic sub-6% mortgage rate.
Speaking of rates, Fannie Mae expects the 30-year fixed-rate mortgage to average a hefty 6.6% in 2024, climbing down to 6.2% in 2025. Looks like we’ll be stuck with higher rates for a while longer, folks.
And the impact? Both existing and new home sales are taking a hit as interest rates climb higher, sending shockwaves through the market. Even the Fannie Mae Home Price Index is feeling the pressure, with forecasts showing a modest 3.2% increase in 2024.
But hold on to your hats, because there’s more. Purchase origination volume is expected to reach $1.4 trillion in 2024, a slight bump from 2023 but not quite the leap expected. Refinance origination volume is also downgraded, signaling tightening financial conditions ahead.
Goldman Sachs adds to the gloom, stating that financial conditions are tightening up. Is this the start of an early spring for the housing market, or are we witnessing a listing explosion?
And here’s an interesting tidbit: Saturdays usually see the peak of listings each week, but it seems Davidson County in Greater Nashville is leading the charge with this trend, accounting for about 40% of the market.
In the midst of all this, the Mortgage Bankers Association reports a decrease in mortgage applications in their weekly survey, adding another layer to the complex puzzle of the housing market.
So, what’s the verdict? Well, it’s a rollercoaster ride of ups and downs, twists and turns. Buckle up, folks, and let’s see where this wild ride takes us next.
Sources:
Fannie Mae now predicts the housing market to be dead until at least 2026 unless prices fall over 30% t.co/Po8OLc2Blz
— Darth Powell 🦈🇺🇲🇺🇦🇵🇱🇫🇮 (@GRomePow) March 19, 2024
www.fanniemae.com/research-and-insights/forecast/economic-developments-march-2024
"Higher rates are tightening financial conditions."
Goldman Sachs via @MikeZaccardi pic.twitter.com/cew8AUgXyP
— Daily Chartbook (@dailychartbook) March 20, 2024
Hitting a new active listing high on a Wednesday is rare.
Is this an early spring, or a listing explosion?
Saturdays are when listings peak each week. So far this is only happening in Davidson County about 40% of Greater Nashville's market. t.co/AbyFPNFHHF pic.twitter.com/rx3qPsmvSs
— Ethan Flynn, CPA (@ethanflynncpa) March 20, 2024
MBA: Mortgage Applications Decreased in Weekly Survey t.co/R6SGhDVUAv pic.twitter.com/fP9LR60lNs
— Bill McBride (@calculatedrisk) March 20, 2024
Realtors are in the Shock and Denial stage
"Its going to hurt buyers!"
"Not one will work for 1%!"No, big data is going to take over and make it so 90% of realtors are no longer needed…..and that 1% will likely fall to a flat fee. pic.twitter.com/Ut580qKkxF
— Darth Powell 🦈🇺🇲🇺🇦🇵🇱🇫🇮 (@GRomePow) March 19, 2024
www.calculatedriskblog.com/2024/03/mba-mortgage-applications-decreased-in.html