Instant Reaction: Mortgage Rates, December 28, 2023

Mortgage interest rates continued their decline this week and have hit the lowest level in six months since May of 2023. Mortgage interest rates are now at an average of 6.61%, easing from 6.67% last week. The typical monthly mortgage payment for a $400,000 home is now at $2,046. While NAR's Pending Home Sales shows flat data from October to November, the recent week's rate decline should motivate buyers who had been priced out of the market.

There are many signs of encouragement heading into 2024 in the housing market, such as more housing inventory from home builders, lower mortgage interest rates, and demographics. This year, even the youngest baby boomer (born between 1946 and 1964) turned 60 years of age. Baby boomers are the largest share of home buyers and may be looking for their retirement property. Last year, half of older boomers paid all cash for their homes and are less concerned with mortgage interest rates. Additionally, millennials (the largest adult generation) may be looking for their first property or a move-up family home.  Housing demand is apparent. With added inventory and better mortgage interest rates, 2024 looks like a better year.

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