{"id":3363,"date":"2023-10-30T06:03:19","date_gmt":"2023-10-30T10:03:19","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=3363"},"modified":"2024-04-25T23:17:06","modified_gmt":"2024-04-26T03:17:06","slug":"mortgage-companies-are-desperate-whats-next-for-homes-and-mortgages-in-2024","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/mortgage-companies-are-desperate-whats-next-for-homes-and-mortgages-in-2024\/","title":{"rendered":"\u201cMortgage Companies Are Desperate\u201d: What\u2019s Next for Homes and Mortgages in 2024?"},"content":{"rendered":"\n
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In February, Zillow said home prices had bottomed out. Was the market about to rally again?<\/p>\n\n\n\n

Zillow predicted that U.S. home prices would climb at the healthy pace of 6.5%, from August 2023 to August 2024. Of course, home prices usually do go up over time<\/a>.<\/p>\n\n\n\n

Now, Zillow economists have slashed their predictions. Their new call? Expect U.S. property prices to be up only about 5% by the time we get to August 2024.<\/p>\n\n\n\n

Meanwhile, Wells Fargo thinks most of the valuation gains homeowners made in 2023 will melt back down. And then we\u2019ll go into 2024 with prices down almost 3% from the market\u2019s 2022 peak. <\/a><\/p>\n\n\n\n

Why so gloomy? It\u2019s about the mortgage rates.<\/p>\n\n\n\n\n\n\n\n

Yes, It\u2019s the Federal Reserve Again<\/h2>\n\n\n\n

Economists see that the Fed still wants to maintain its high interest rates<\/a>. Rates are, as of mid-October 2023, around 8%. These high loan rates keep a lot of potential home buyers sidelined.<\/p>\n\n\n\n

The rates are just too high.<\/p>\n\n\n\n

True, builders sold homes in 2023, and mortgage companies did make loans \u2013 partly by offering interest rate buydowns<\/a>. As for home sales during the rest of this year, Fannie Mae expects them to happen at the slowest pace in more than a decade.<\/p>\n\n\n\n

Meanwhile, a \u201cvast majority\u201d of people are put off by the combination of high mortgage rates and high home prices, according to a Fannie Mae representative. And the U.S. housing market will likely remain muted into 2024. Fannie Mae gives one major reason. The Federal Reserve\u2019s persistence in trying to tame inflation means easing rates won\u2019t happen any time soon.<\/p>\n\n\n\n

Mortgage Companies Are Desperate, Says the Wall Street Journal<\/em><\/h2>\n\n\n\n

With mortgage applications at their lowest point in almost three decades, says the Wall Street Journal<\/em>, several mortgage companies are actually clawing back bonuses from people they brought on during the 2020-2022 housing boom. Hundreds of former employees are being told to send their bonuses back.<\/p>\n\n\n\n

\u201cThe mortgage industry is notoriously boom or bust, but this bust is especially bad,\u201d says WSJ.<\/p>\n\n\n\n

Layoffs, shutdowns, and mergers are now rampant, as the mortgage sector swings \u201cfrom feast to famine.\u201d<\/p>\n\n\n\n

And multiple companies are even taking their former employees to court in order to claw back the bonuses they paid before letting people go.<\/p>\n\n\n\n

Industry employment has plummeted 20% since 2021, with more cuts expected.<\/p>\n\n\n\n

What\u2019s Next, Then? Could Mortgage Rates Come Down at All in 2024? (Spoiler: No. Er\u2014Yes.)<\/h2>\n\n\n\n

Some economists see rates going down to the 7.50% range at the start of 2024. If so, buyers could be better off watching and waiting than jumping in right now.<\/p>\n\n\n\n

But others believe there\u2019s no point in waiting for a break any time soon, because rates haven\u2019t reached their peak yet. As long as the U.S. Central Bank keeps bank rates hiked, mortgage interest could, in turn, go even higher in 2024.<\/p>\n\n\n\n

Still, many financial pros say the end of 2024 could bring relief, like light at the end of a tunnel. They believe the economy will weaken in the second half of 2024, sending mortgage rates down into the mid-six-percent range \u2014 and perhaps on down into the high five-percent range as we head into 2025.<\/p>\n\n\n\n

Here\u2019s the new prediction from Wells Fargo for the average rate on a 30-year, fixed mortgage:<\/p>\n\n\n\n