Here is what to expect in the Mortgage Market week of 12/9

What to Expect in the Mortgage Market the Week of December 9, 2024

As we approach mid-December, the mortgage market is influenced by a mix of seasonal trends, recent economic data, and shifting interest rates. Here's an overview of what homebuyers and industry professionals should expect this week:

1. Interest Rates Trending Down

Mortgage rates have shown a modest but noticeable decline in recent weeks, with 30-year fixed rates averaging 6.59% as of December 5, down 21 basis points from the prior week. This drop marks a continued easing trend, making home financing slightly more affordable compared to earlier in the year. However, the rates for adjustable-rate mortgages (ARMs) and other products remain relatively high, reflecting broader market uncertainty. Analysts predict rates may hold steady or see minor fluctuations, depending on economic data released this week.

2. Jobs and Inflation Reports’ Influence

The December 6 jobs report highlighted steady but slowing job growth, a factor that supports the Federal Reserve's more cautious approach to interest rate hikes. While the report points to cooling inflation, which aligns with the Fed's goals, it may not trigger significant policy changes before the next Fed meeting later this month. These economic conditions may offer continued stability in mortgage rates, though a strong market surprise could disrupt this trend.

3. Seasonal Homebuying Activity

December typically sees lower housing market activity, with many buyers and sellers stepping back for the holidays. However, with rates slightly declining and home prices stabilizing in some areas, prospective buyers may find opportunities this month, especially if they can act quickly on favorable rate offers. Keep in mind, though, that inventory remains constrained, driven by homeowners holding onto historically low-rate mortgages, limiting options for new buyers.