New insights.

According to a new report from Freddie Mac, 30-year mortgage rates are projected to gradually decline in coming quarters, which could trigger a surge in buyer demand, primarily from first timers. However, a tight inventory will lead to only moderate sales increases, with prices rising 2.1% in 2024.

Meanwhile, boosted by an “AI boom,” median sales prices in the San José metro area are the first to exceed $2 million, and Silicon Valley’s appreciation rate is among the highest in the nation. Overall, 89% of U.S. metro areas saw year-over-year price gains.

The 30-Year Fixed Dance

After peaking around 7.8% in October 2023, weekly average rates on 30-year fixed mortgages were just under 6.9% in the first week of March 2024. Any other time, we’d be singing from the rooftops, but we’re nowhere near the historic lows we saw just a few years ago. Still, any relief is good news.

Mortgage rates on the decline.

According to the folks at Freddie Mac, average interest rates on a 30-year fixed-rate mortgage fell to 6.61% last week, the ninth consecutive week of decline, but still higher than one year ago (6.42%). Economic experts expect further declines heading into 2024, although the current dip has yet to spur an uptick in home sales due to a lack of inventory.

Here's a look at how key economic indicators fared in 2023:

The interest rate long game

Despite a huge spike in mortgage interest rates buyers are still actively shopping for their next homes. And even though inventory remains sparse, current rates are pressuring some sellers to lower their prices to make their homes more affordable. Recent national data found that 5.9% of homes for sale in August experienced price cuts, and September saw even more sellers (6.5%) posting reduced prices.

Peaks & Valleys

Although average mortgage interest rates have seen a slight decline over the past few weeks, they’re still twice as high as just one year ago. Meanwhile, median housing prices in the Bay Area are on the rise despite a 14% drop year over year. With this level of volatility, a fixed-rate mortgage makes more sense every day. But again, personal circumstances may do the deciding for you.