From CNBC:

Mortgage interest rates dropped in December, leading to increased optimism about the housing market. Rates are down a full percentage point from October and are expected to fall further. For the first time since 2010, homeowners are more optimistic about rates going down rather than up, according to a Fannie Mae survey.

The average rate on the 30-year fixed mortgage has experienced significant fluctuations since the start of the Covid pandemic. After hitting record lows in 2020 and 2021, rates doubled in 2022, reaching a 20-year high in October 2023. Rates have since fallen below 7%, although they are still twice what they were three years ago.

Real estate agents are reporting increased buyer interest, with an expectation of more inventory coming on the market. Tight inventory has kept prices high, but a more positive outlook on mortgage rates may prompt homeowners to list their homes for sale, helping to increase the supply of existing homes in the new year.

A recent report from Redfin found a 10% increase in demand for homebuying services in December, and pending sales on existing homes saw the smallest decline in two years. However, the future direction of interest rates and home prices will influence the housing market in the coming months.

The trajectory of economic data will likely determine the direction of mortgage rates. If the data continues its trend, rates could potentially go down into the 5% range, or even the high 4% range, according to Matthew Graham, chief operating officer of Mortgage News Daily. The average rate on the 30-year fixed mortgage was 6.76% at the beginning of the article.



Read more: Mortgage rate decline pulls buyers back into the housing market