Mortgage Rates Fall Again: Is a ‘Balanced Housing Market’ Finally on the Horizon?

Published by | November 17, 2023

This downward trend in mortgage rates is one sign that 2024 might be a happy year for home shoppers.

With just about six more weeks to go in 2023, the tough housing market might finish the year with a surprise.

Mortgage rates fell for the third week in a row, dipping to 7.44% for a 30-year fixed-rate mortgage as of Nov. 16, according to Freddie Mac. While this decline is not far from last week’s 7.5%, it’s a marked reversal of what seemed like an inevitable climb toward 8% just a few weeks earlier.

This downward trend in mortgage rates is one sign that 2024 might be a happy year for home shoppers.

“The combination of continued economic strength, lower inflation, and lower mortgage rates should likely bring more potential homebuyers into the market,” says Sam Khater, Freddie Mac’s chief economist.

Yet two other variables still hang in the balance that will help determine the ultimate outcome: the number of homes for sale and how high they’re priced.

“Recently falling mortgage rates may breathe life into buyer activity, which may mean more pressure on home prices as growing demand burdens low inventory levels,” says® economic research analyst Hannah Jones in her analysis. “However, should homeowners respond to falling mortgage rates by entering the market, we could see a more balanced housing market in the coming months.”

While mortgage rates headed south, median home prices went north for the week ending Nov. 11, rising by 0.7% over last year. (The median list price in October was $425,000.)

Home prices have been firmly stuck in neutral lately, remaining flat or growing slightly on a year-over-year basis since mid-July.

Home shoppers might wonder what’s behind high home prices that don’t seem to budge. Yet the question to ask is not what but who? The answer: homeowners who are refusing to sell.

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