FANNIE MAE’S FORECAST
Edition #24

FANNIE MAE’S FORECAST

Are higher interest rates here to stay?


WELCOME

Looks like interest rates are taking the leap year literally.?

Earlier this week, Fannie Mae released a revised estimate on where it expects mortgage rates to settle for the current period. Initially optimistic that last year’s ‘hot rate summer’ was a one-time spike, the firm has now bumped its prediction up from 6.1% to 6.5% for a fixed-rate 30-year mortgage.?

For buyers, that means all signs are pointing up—inventory and prices also rose slightly in January.


SHARPEN YOUR SKILLS

??Today’s Top Rec:

Looking for a deeper dive (plus expert takes!) on this week’s top real estate stories? Check out the latest edition of The Blueprint, covering the new home sales spike, current homebuying attitudes, booming metros, and more.


TRACK THE TRENDS


MARKETS

Builder Buy-Downs

These days, builders are doing everything they can to keep new homes affordable—even buying down mortgage rates to make new construction more accessible. According to the latest data from the Census Bureau, new home sales increased 1.5% from December to January. But with 456,000 new homes still for sale—and interest rates holding steady at over 7%, builders are willing to get creative to keep their inventory moving.?

Why builders choose buydowns over price cuts:

  • Mortgage rate buydowns allow builders to sell their properties for less without reducing the price of their listings. In fact, in September, when existing home sales plummeted, new home sales surged to their highest level since February 2022 despite new home prices increasing.?
  • Interest rates are consistently a pain point for buyers. Advertising a lower-than-market rate and ongoing savings motivates buyers without the stigma of price cuts.?
  • Buydowns also protect the appraisal value of the builders’ properties. By holding values steady, they can incentivize today’s buyers with a low rate, while locking in higher future prices when the going interest rate drops.?


REC ROUNDUP?

The Friday Five

?? Goodbye buyer’s remorse. Never regret a home decor purchase with Paige’s budget-friendly design tips.??

?? Blackbeard’s barn. How many pirate statues can fit in one house? Leave it to Unhinged Listings to find out.?

?? Stunning sales. Check out the top 10 biggest real estate deals of last week.?

??Proof of financing. Want your offer to be taken seriously? Never skip this step. ?

??Price reductions. How to remarket a property after a price reduction.


WHAT’S NEW FROM ESTATE MEDIA

Josh, James, and David talk investing in an election year

Last year was a tough year for agents in every market, at every price point. And with election turbulence, high-interest rates, and hot prices marking 2024 as another challenging season, it’s going to take a targeted, creative approach to stand out and sell.?

Join James Harris, David Parnes, and Josh Flagg in the latest episode of Rise Above the Ranks as they talk elections, economic optimism, and what to expect from buyers and sellers as 2024 unfolds.?


FEATURED LUXURY LISTING

Summit Ski Sanctuary

Today’s featured listing is an incredible Utah ski oasis with panoramic views of Park City. Designed by the masterfully modern Michael Upwall, this stunning estate offers direct ski access to multiple runs—with two lifts serving the property throughout the season. When you’re not hitting the slopes, the luxe property’s rooftop hot tub, resort-style primary bath, and surrounding serene scene offer the ultimate Utah getaway experience.


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Estate Elegance. Your daily dive into luxury real estate.?

The Blueprint. Stay up-to-date on the world of residential real estate. Powered by James Harris & David Parnes.


BEFORE WE GO...


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