After a year filled with record-breaking interest rates and home prices, experts are optimistic about the housing market in 2024.
In December, the average mortgage rates fell below 7% for the first time since August, following a peak of 8% in October. This surge in rates had pushed housing costs to their highest level since 2000.
According to Freddie Mac, the average rate on a 30-year fixed rate mortgage dropped to 6.95% from 7.03% last week. This is a significant improvement compared to the rate of 6.31% a year ago. On the other hand, the 15-year fixed rate mortgage increased slightly to 6.38% from 6.29%.
Jessica Lautz, the deputy chief and vice president of research at the National Association of Realtors, expressed optimism about the decline in rates, stating that it is good news for buyers.
Experts predict that interest and mortgage rates will gradually decrease, providing individuals with more flexibility in their budgets for mortgage payments. Moreover, Nicole Bachaud, a senior economist at Zillow, mentioned that inventory is increasing with the resurgence of new listings.
This decline in interest rates is positive news for homebuilders, as it will be easier for them to secure loans for construction projects. As a result, homebuyers can expect a larger supply of homes in the market.
However, despite these developments, consumers may still face challenges in terms of affordability. Danielle Lautz added that home price appreciation is expected to remain stagnant nationally for the next year, indicating that prices will not significantly change from their current levels.
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