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How’s the market?

October 2023

Here are 3 compelling reasons to expect mortgage rates to decline in 2024.

1: Reduced Real Estate Transactions
A 30% drop in real estate transactions nationally since ’21 has lenders facing increased competition. Rates are currently about 1% higher than they should be based on historical metrics. This 1% buffer gives lenders the ability to offer lower rates in order to compete. And, the economic impact of two million fewer transactions has taken roughly a quarter of a trillion dollars out of consumers’ wallets, which will likely contribute to a weaker economy.

2: Struggling Consumer
Signs of a weak consumer will emerge as credit card debt just surpassed $1 trillion for the first time, and personal savings rates are now half the historical average. A healthy economy relies on a robust consumer base, making these indicators concerning.

3: Government Borrowing
A large portion of our government debt has a 1% rate and will mature in September ’24. The government will have to borrow to replace the maturing debt and today’s rate to borrow is significantly higher than 1%. Think of this refinancing debt…only in the wrong direction. The Fed will be motivated to find ways to lower rates.

In short, expect a weaker but stable economy in 2024, with declining mortgage rates.

How’s the market?

October 2023

Here are 3 compelling reasons to expect mortgage rates to decline in 2024.

1: Reduced Real Estate Transactions
A 30% drop in real estate transactions nationally since ’21 has lenders facing increased competition. Rates are currently about 1% higher than they should be based on historical metrics. This 1% buffer gives lenders the ability to offer lower rates in order to compete. And, the economic impact of two million fewer transactions has taken roughly a quarter of a trillion dollars out of consumers’ wallets, which will likely contribute to a weaker economy.

2: Struggling Consumer
Signs of a weak consumer will emerge as credit card debt just surpassed $1 trillion for the first time, and personal savings rates are now half the historical average. A healthy economy relies on a robust consumer base, making these indicators concerning.

3: Government Borrowing
A large portion of our government debt has a 1% rate and will mature in September ’24. The government will have to borrow to replace the maturing debt and today’s rate to borrow is significantly higher than 1%. Think of this refinancing debt…only in the wrong direction. The Fed will be motivated to find ways to lower rates.

In short, expect a weaker but stable economy in 2024, with declining mortgage rates. To see how this might affect you, contact me at wade@PerryPropertiesGroup.com or 720-320-2288.

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Wade, Lori, and Bianca have a combined 30 years of experience in the Denver market.

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