Declining Mortgage Rates May Bring a Warmup to the Market for 2024.

In Fairfield County and New Haven County we have seen an improvement in new listings by 14% over the past few weeks since December, maybe thanks to a 15% decrease in mortgage rates following the peak of 7.79% in October.

The next Federal Open Market Committee (FOMC) will be meeting on January 30/31.  Many experts believe that the Fed is going to hold rates steady at 5.25-5.50% however the FOMC has signaled several rate cuts throughout 2024 as inflation eases and the economy slows.  The following meeting will be on March 19/20. This meeting will be associated with a summary of the economic projects.

Fannie Mae surveyed a significant number of consumers that say they are expecting mortgage rates to keep falling over the next 12 months.  A vast shift in consumer expectations could free current homeowners from the mortgage lock-in effect* and increase the supply of new listings for sale in 2024.

*The lock-in effect is a disincentive for existing homeowners to sell their homes because they do not want to give up their low rates when buying a new home.

(Sources: Smart MLS, Federal Reserve, Freddie Mac, Investopedia & Fannie Mae)