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Market Update - June 21, 2024

Friday, June 21, 2024

This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.

Rates are provided by Housing Wire in conjunction with Polly. Rates are updated in real-time. Polly data is calculated using actual locked rates. Rates are inclusive of locks that occur below par, at par and therefore consider discounts and rebates.

Market Commentary:

For the week of June 14th to June 20th, interest rates improved slightly.  Rates could continue to decrease if inflation cools, but don't expect a huge drop this year. According to the Mortgage Bankers Association's latest forecast, mortgage rates may fall to 6.5% by the end of 2024.

The Fed will begin cutting interest rates once it's clear that inflation has cooled enough and won't heat back up — or if the job market deteriorates much more than expected, but there are currently not many signs of that. Here are key takeaways from the Fed's latest decision on interest rates:

  • Fed Chair Jerome Powell calls May inflation data 'encouraging'
  • No concerns about the job market
  • First rate cut in September (best bet)

Fed Watch: Target rate (in bps) possibilities, according to the CME Group:

Market Review: Optimal Blue's Production Metrics:

Exuberant Equities

During the Tech craze peak, the equity share of household assets was almost 32%. Today it's 34%. Similarly, the equity share of household financial assets has risen from a peak of 45% during the dotcom boom to 50% today. Moreover, the median household now has a staggering $140,000 of equity holdings. When the next bear market comes, and they always do, the pain will be widespread and deep. - Elliot Eisenberg, Ph.D. , Economist

News You Can Use

 

Interest rate and annual percentage rate (APR) are based on current market conditions as of 06/20/2024, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Edina Realty Mortgage. Not available in all states. Rate is as of 06/20/2024 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac's economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac's business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an "as is" basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.

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