Mortgage originations are on the upswing
Warmer weather is approaching, which means an uptick in home purchases will occur. Buyers holding out on a drastic rate drop should reconsider. Housing inventory nationwide continues to be sparse. Once rates drop, home prices are expected to increase.
Don’t expect rates to immediately drop
Although, we are trending in the right direction.
We’re in a similar market to what we saw in the 90s. The Fed will most likely make smaller adjustments as policy changes from being very restrictive to a more moderate and long-run neutral level, which will help us move toward more average and historical mortgage rates of around 5%.
Mortgage rates already reflect expected cuts to short-term rates this year and next, and the pace and number of those coming policy changes will continue to be highly data dependent.
We’re slowly moving to a more normal market
Don’t expect to see a normal market with a 5% interest rate this year. We may be able to be there by the end of next year, but it’ll only be a slow progression toward that.
The good news is that as this happens, not only does it create opportunities for people to save money by being able to refinance, but also housing inventory will increase due to lower interest rates.
