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Renting in Seattle? Discover the most affordable Seattle suburbs to live in 2024.

With the Space Needle soaring, Olympic Mountain looming and a buzzing city coming to life, there are more than a few reasons to settle down in Seattle. If you’re new to the city you may be wondering, how much does rent cost in Seattle? The average monthly rent prices are $1,422 for a studio, $2,145 for a one-bedroom unit and $2,991 for a two-bedroom unit. However, these prices may not fit your budget.

If you’re looking for a more affordable alternative in the Emerald City, you’re in the right place. Below, we’ll explore 12 of the most affordable Seattle suburbs, where you can still enjoy the Pacific Northwest charm without breaking the bank. From scenic landscapes to tight-knit communities, these economical enclaves are budget-friendly ways to enjoy the stunning beauty of the Puget Sound region.

Average rent for a one-bedroom: $1,450

Average rent for a two-bedroom: $2,218

Distance from Seattle: 17 miles

Apartments for rent in Des Moines

Claiming the first place on our list of affordable Seattle suburbs is Des Moines. Only about 17 miles south of Seattle, you’re just a short distance from the city center. You’ll also save close to $700 monthly on rent if you’re planning to lease a one-bedroom apartment.

There are plenty of things to do in Des Moines. For example, you can explore Saltwater State Park along the shores of Puget Sound or spend the afternoon checking out the sea life at MaST Center Aquarium.

Average rent for a studio: $1,275

Average rent for a one-bedroom: $1,522

Average rent for a two-bedroom: $1,765

Distance from Seattle: 11 miles

Apartments for rent in Tukwila

Just 11 miles south of Seattle is our second suburb, Tukwila. The area is home to about 21,600 residents. The average rents are also much less than in Seattle. For example, a one-bedroom unit in Tukwila costs $1,522 compared to $2,145 in Seattle.

Tukwila is home to the Museum of Flight, an expansive museum with over 175 aircraft and plenty of displays, giving you plenty to explore. You can also visit the sprawling Southcenter Mall, which houses plenty of options for shopping, dining and killing a few hours in the middle of the day.

Average rent for a studio: $1,699

Average rent for a one-bedroom: $1,560

Average rent for a two-bedroom: $1,845

Distance from Seattle: 20 miles

Apartments for rent in Kent

As a renter searching for affordability, you might want to consider Kent. It’s a fantastic suburb located about 20 miles south of Seattle. The average rent for a one-bedroom unit is about $600 less than in Seattle.

In Kent, you can easily explore the scenic Green River Natural Resources Area, which has walking and biking trails that are perfect for enjoying the picturesque riverbanks. Kent is also home to the ShoWare Center, a popular venue for hockey games, concerts and more. 

Average rent for a studio: $1,595

Average rent for a one-bedroom: $1,604

Average rent for a two-bedroom: $1,600

Distance from Seattle: 28 miles

Apartments for rent in Auburn

A bit farther from Seattle you’ll find Auburn, which is around 28 miles to the south. Auburn is an affordable suburban alternative to much of the surrounding area. The slightly longer commute might be a trade-off worth considering as the average rent is considerably less.

There’s plenty to do in Auburn, like exploring Game Farm Wilderness Park, where you can camp and explore the trails. You can also check out Emerald Downs, a great racing track to kick back and watch the ponies fly.

Average rent for a studio: $1,215

Average rent for a one-bedroom: $1,621

Average rent for a two-bedroom: $1,913

Distance from Seattle: 24 miles

Apartments for rent in Federal Way

About 24 miles away from downtown Seattle is Federal Way, another great suburb for renters to consider. Home to 99,000 residents, Federal Way is an excellent option for renters looking for a less busy city – and more affordable rent prices.

Federal Way supports a range of activities, including the Pacific Bonsai Museum, where you can admire a stunning collection of bonsai trees from around the world. You can explore Dash Point State Park, where you’ll find a beach, hiking trails and waterfront views. The city is also home to the Wild Waves Theme & Water Park, which provides thrilling rides and water slides, perfect for a family day in the heat of the summer.

Average rent for a studio: $1,950

Average rent for a one-bedroom: $1,651

Average rent for a two-bedroom: $1,852

Distance from Seattle: 30 miles

Apartments for rent in Everett

Securing the sixth spot on our list, Everett is a familiar Seattle suburb. This area is home to roughly 110,800 residents, making it feel much more city-like than many of the other towns featured in this article.

Everett is home to the Boeing Future of Flight Aviation Center, where you can take tours and learn about the aviation industry’s history and innovation. For outdoorsy types, Jetty Island, a sandy beach destination perfect for kiteboarding and kicking back by the beautiful Puget Sound, is a must-see.

Average rent for a one-bedroom: $1,722

Average rent for a two-bedroom: $2,250

Distance from from Seattle: 15 miles

Apartments for rent in Mountlake Terrace

Claiming the seventh spot on our list of renter-friendly Seattle suburbs is Mountlake Terrace. It’s only about 15 miles north of downtown, making it a great option for daily commuters.

While a smaller city, there is plenty to do in Mountlake Terrace. You can take a quick trip to the serene Ballinger Park, full of walking trails, a lake, picnicking and more. For a taste of local culture, you can visit Mountlake Terrace Pavilion, which hosts a ton of events and activities throughout the year.

Average rent for a studio: $1,672

Average rent for a one-bedroom: $1,930

Average rent for a two-bedroom: $2,119

Distance from Seattle: 12 miles

Apartments for rent in Burien

If you’re a longtime Seattle resident, then you probably know about Burien. In Burien, one-bedroom units generally rent for $1,930 and two-bedroom units are available for around $2,119, providing considerable savings compared to Seattle.

If you’re wondering what to do in Burien, you can explore Seahurst Park, which has gorgeous tidepools and scenic waterfront views. Burien’s bustling downtown area offers a stellar food scene with lots of restaurants, making it a great destination for foodies looking to expand and refine their palettes.

Average rent for a studio: $1,894

Average rent for a one-bedroom: $1,974

Average rent for a two-bedroom: $2,200

Distance from Seattle: 18 miles

Apartments for rent in Edmonds

Edmonds is home to about 42,700 people and is just a bit over 17 miles north of downtown Seattle. Located along Puget Sound, living in Edmonds means you’re never far from the water and the many activities that come with it. You can explore Edmonds Beach and Brackett’s Landing North, or simply enjoy stunning sunset views over Puget Sound.

The town is also known for its strong arts community, with plenty of art galleries and the Edmonds Center for the Arts, providing a variety of events for artsy folks to enjoy.

Average rent for a studio: $1,710

Average rent for a one-bedroom: $2,000

Average rent for a two-bedroom: $2,620

Distance from Seattle: 14 miles

Apartments for rent in SeaTac

Ranking 10th on our list of affordable Seattle suburbs for apartment hunters is SeaTac. This suburb has a population of 30,700 and is roughly 14 miles south of Seattle.

SeaTac is most well-known as home to the SeaTac International Airport, but there’s plenty to do on an afternoon or weekend. You can explore Angle Lake Park, which boasts a scenic lake stocked for fishing and ideal for boating, making it a great spot for nature lovers of all persuasions. The city also provides convenient access to the Light Rail, allowing making trips into downtown Seattle a breeze.

Average rent for a studio: $1,877

Average rent for a one-bedroom: $2,039 

Average rent for a two-bedroom: $2,662

Distance from Seattle: 20 miles

Apartments for rent in Bothell

Bothell is the 11th suburb on our list. You’ll find Bothell about 20 miles northeast of Seattle. Commute times can vary depending on bus routes and traffic, but you’ll still save significantly on rent costs.

Bothell is home to beautiful Bothell Landing Park, a picturesque spot along the Sammamish River with walking trails, a historical museum and a tranquil setting for soaking up the Seattle sun. Beyond that, the McMenamins Anderson School, a historic schoolhouse turned into a unique entertainment complex, offers dining, bars, a movie theater and a pool, making it a great spot to start or end a night on the town.

Average rent for a one-bedroom: $2,050

Average rent for a two-bedroom: $1,915

Distance from Seattle: 7 miles

Apartments for rent in Mercer Island

Taking the 12th and final spot on our list of renter-friendly, affordable Seattle suburbs is Mercer Island. Primarily known for its luxurious homes, its rental prices are surprisingly more budget-friendly than one might expect. On average, you’ll save about $100 a month renting a one-bedroom unit or about $1,000 for a two-bedroom unit. It’s also commuter-friendly, as Mercer Island is a mere 7 miles from Seattle’s city center. 

The area is surrounded by the shimmering waters of Lake Washington, offering opportunities for boating, swimming and lakeside relaxation at Luther Burbank Park. The town is also known for its scenic parks and large green spaces, making it an ideal area for renters seeking a peaceful escape from city life without fully cutting the tether to urban conveniences and entertainment.

Remember, if you’re looking to hop over from renter to buyer, make sure to also check out the most affordable Seattle suburbs to buy a home.

Methodology

Affordability is based on whether a suburb’s one and two-bedroom rent was less than Seattle and under 30 miles from downtown Seattle. Average rental data from Seattle rental market trends on October 26, 2023. Population data sourced from the United States Census Bureau.

Source: rent.com

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Speaking with your current lender about refinancing options is a great first step if you currently have low credit.

Key Takeaways: 

  • Refi programs exist to specifically help low-credit applicants.
  • A cosigner with a high credit score can help you successfully apply for refinancing.
  • Mortgages with APR may be more costly in the long run.

When you refinance your mortgage, you’re basically replacing that mortgage with a different loan. Your lender will then use that new mortgage to pay off the old one first, so you’ll only have one monthly payment.

A refinance can have different interest rates and terms. A lower interest rate can result in less expensive monthly payments and reduce the overall cost of your loan. Conversely, shorter terms can help you pay down a new loan much faster via larger monthly payments.

It’s certainly possible to refinance with bad credit once you know your options. We’ll discuss several popular options and explain how Credit.com can help you find strong mortgage rates based on your current circumstances.

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Can You Refinance With Bad Credit?

Your credit score plays a major role when you apply for a loan, but refinancing and  is certainly possible. In fact, Federal Housing Administration (FHA) loans can help you secure financing with a credit score between 500 and 579 if you provide a 10% down payment.

Five Options for Refinancing With Bad Credit

It’s possible to secure new funding with low credit. Below are five of the most popular options for low-credit refinancing. 

1. Talk to Your Current Lender

If you’re in good standing with your current mortgage lender, talk to them about refinance options. Being in good standing means you’ve regularly made on-time mortgage payments and haven’t had any issues with your lender.

Lenders make money on your mortgage. If you want to refinance to extend your mortgage payments—to reduce your monthly payments, for example—the lender could make more money off your loan in the future. Your current lender may want to keep your business and could be more likely to work with you.

2. Use a Cosigner

A cosigner is someone willing to help you take on the responsibility of making regular mortgage payments. Cosigners with good credit can help you secure funding you normally wouldn’t be eligible for.  

Cosigners can be spouses, relatives, close friends, or business partners. If you’re attempting this approach, make sure you have a strong financial plan to show your cosigner that you’ll make timely payments. With a cosigner, your credit history  is linked, so missing a payment can hurt both your credit scores.

3. Use an FHA Streamline, Simple, or Cash-Out Refinance Loan

FHA-backed mortgages are known to have less strict credit requirements, and the same applies to refinances. If you have bad credit and late payments on your credit report, you might consider FHA programs—especially if you already have an FHA loan.

Streamline FHA Refinance

Streamline FHA refinance programs are for those with an FHA mortgage who want to refinance with an FHA loan. Your mortgage must be current, and you can’t get more than $500 cash out of this refinance. Appraisals aren’t a requirement for these loans.

There are two types of streamline loans:

  • Credit qualifying: You provide the income and credit documentation you normally would when getting a mortgage. If you’re taking one of the borrowers off the mortgage during the refi, you must use this option.
  • Noncredit qualifying: At least some credit review—and a review of past performance on your existing mortgage—is required. But it may not be as comprehensive as a credit-qualifying loan.

Simple Refinance

Simple refinance is another option that doesn’t allow cash out. This program is only relevant for refinances on primary residences or secondary residences with HUD approval. You also have to be up-to-date on mortgage payments.

Cash-Out Refinance

FHA cash-out refinance programs let you get some cash back during refinance if you have equity in your home. You’re limited to 85% to 95% of equity, depending on the status of your current mortgage.

To qualify, you must have had the property for at least 12 months and made the last 12 mortgage payments in the month they were due. Other credit and financial factors may also apply.

4. Apply for a VA Refi Program

The VA provides several refinance options for those who are eligible because they’re qualifying veterans, active-duty service members or eligible family members. As with FHA refinance options, you can find programs that support straight or cash-out refinance.

Interest Rate Reduction Refinance Loan

This is a refinance option that gets veterans a lower interest rate on their mortgage. Here’s who’s eligible:

  • Veterans
  • Active-duty service members
  • Members of the National Guard or Reserves called to active duty
  • Some surviving spouses
  • Current Reserve and National Guard members (after six years of qualifying service)

Cash-Out Refinance

This VA refinance has the same eligibility requirements as the Interest Rate Reduction Refinance Loan. The loans typically come at market rates and include a VA funding fee.

5. Consider the USDA Streamlined Assist Refinance Program

The United States Department of Agriculture (USDA) offers a few refinance programs but notes that the Streamlined Assist refi is the most popular. It doesn’t require an appraisal unless a subsidy is involved. A full credit review is not required. However, the loan must have been paid on time for the previous 12 months and is only available for certain types of homes.

Improve Your Credit Before You Refinance

If you can’t find a refinance that works with your credit score—or you don’t find one that works for you—you might want to improve your credit before applying for a refi. Start by accessing 28 of your FICO® scores via ExtraCredit® to see where you stand.

You can improve your credit by:

  • Making on-time payments. Payment history accounts for a large part of your credit score.
  • Paying down revolving credit, such as credit cards. Credit utilization is another big part of your score.
  • Dispute credit errors on your report with the credit bureaus to repair your score.

Find the Right Mortgage for You

No matter where you’re at, finding a mortgage is an exciting—and overwhelming—process. Whether you’re ready to start looking for a refinance now or want to wait until you’ve improved your credit, Credit.com can help you with your goals. 

We offer tools that help you find competitive mortgage rates and provide a mortgage calculator for anticipating your financial needs.

Source: credit.com

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The real estate market is often characterized by ups and downs, with certain seasons being more popular for buying and selling homes than others. While the spring and summer months may traditionally steal the spotlight, homebuyers increasingly recognize the advantages of purchasing a home during the off-season. These are the often-overlooked benefits of buying a home during the real estate off-season.

Enjoying our content? Subscribe to our free weekly newsletter to get real estate market insights, news, and reports straight to your inbox.

Reduced Competition

One of the most significant advantages of buying a home in the off-season is the reduced competition. With fewer buyers actively searching for homes, you’re less likely to find yourself in bidding wars or facing multiple offers on the same property. This diminished competition allows you to negotiate more effectively and potentially secure a better deal. 

Motivated Sellers 

During the off-season, sellers are often more motivated to close deals quickly. Whether they are relocating for work, downsizing, or have personal reasons prompting the sale, motivated sellers are likely to be more flexible when it comes to negotiations. This increased willingness to negotiate can translate into a lower purchase price, additional concessions, or favorable terms for the buyer. 

Lower Prices 

Historically, home prices have been known to dip during the off-season due to decreased demand. Sellers may be more willing to lower their asking prices to attract potential buyers and facilitate a faster sale. This affordability factor can be particularly appealing for budget-conscious homebuyers looking to maximize their investment. 

Faster Closing Processes

The off-season often means a more streamlined real estate process. With fewer transactions taking place, mortgage lenders, real estate agents, and other professionals involved in the home buying process may have more time and resources to dedicate to your transaction. This can result in a smoother and faster closing process, saving you time and reducing stress. 

Accurate Property Inspection 

Off-season homebuyers have the advantage of inspecting properties under less-than-ideal weather conditions. This allows for a more accurate assessment of the property’s condition, including its performance during colder months. From checking the heating system to evaluating insulation, winter or rainy season inspections provide a comprehensive understanding of the home’s functionality throughout the year. 

While the idea of house hunting in the off-season may seem unconventional, it comes with benefits that can make the experience more enjoyable and financially advantageous. By exploring the market during the off-season, you may just find your dream home at a dreamier price! 

Are you looking for a home this winter? Give us a call today! One of the experienced real estate agents at Zoocasa is happy to help you along your exciting home-buying journey!

Looking for a home this off season?

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Source: zoocasa.com

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New Home Sales, Inventory, Pricing. All Good News for Builders and Buyers

New home sales finished 2023 on a positive note, posting seasonally adjusted numbers higher than in both November and the prior December. The U.S. Census Bureau and the Department of Housing and Urban Development said sales of newly constructed homes during the month were at an annual rate of 664,000 units. Further, the November rate was adjusted from 590,000 to 615,000 units. The December estimate is 8.0 percent above the revised November estimate and a 4.4 percent improvement over the pace in December 2022.  Analysts polled by Econoday had a consensus forecast of 650,000.

New home prices slipped slightly from a year earlier.  The median price of a home sold in December 2023 was $413,200 compared to $432,100 in December 2023. The average price fell from $495,600 to $487,300.

On an unadjusted basis, sales last month were estimated at 50,000 units, up from 42,000 in November. For the entirety of 2023, sales totaled 668,000 units, a 4.2 percent increase over the 2022 sales of 641,000.

At the end of the reporting period, an estimated 453,000 new homes were available for purchase, projected to be an 8.2-month supply at the current sales pace. This is nearly identical to the assumed inventory in December 2022.

December was a strong month in the Northeast. Sales increased 32.0 percent from November, although it was also the only region coming in lower (they were down 2.9 percent) on an annual basis.  In the Midwest, sales were up 9.2 percent and 6.0 percent over the previous two sales periods and the South posted increases of 10.6 percent and 3.7 percent, respectively. Sales in the West eked out gains of 0.9 percent month-over-month and 0.4 percent on an annual basis.

Source: mortgagenewsdaily.com

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“Overall, we expect 2024 to be a better year than 2023 for homebuyer affordability and the mortgage industry,” Fannie Mae’s chief economist said.

WASHINGTON – The housing market will begin a gradual return to a “more normal balance” in 2024, and mortgage rates are expected to end the year below 6%, Fannie Mae analysts said.

Fannie Mae’s Economic and Strategic Research (ESR) Group said the lower rate environment should boost refinance volumes, which are already on the upswing. Lower rates are also likely to loosen the so-called lock-in effect that’s had a stronghold on the market.

“In fact, the ESR Group expects the annualized pace of existing home sales to move up to 4.5 million units by the fourth quarter of 2024, compared to 3.8 million in Q4 2023,” Fannie Mae analysts said in the January report. “However, a full recovery to the pre-pandemic sales rate is expected to take years, as housing affordability remains stretched extremely thin by historical standards relative to household incomes.”

At the same time, housing supply shortages and affordability constraints will continue to bolster the market for new single-family homes, with 2024 starts and new home sales forecast to top 2023 levels.

The ESR Group also said home prices are expected to rise 3.2% over the year, compared to 7.1% in 2023. While the latest forecast continues to project a slowdown in economic growth in 2024, the ESR Group anticipates a brighter economic backdrop compared to previous months, replacing its call for a modest recession with positive-but-below-trend growth in 2024.

The ESR Group noted the rapid recent easing in financial conditions, the Federal Reserve’s December meeting and the solid, upward trend in real personal income growth in October and November as positive impulses for growth over the coming quarters. But, the group said, the economy still faces a higher-than-normal risk of recession.

“Inflation’s decline and the resultant Fed pivot to signaling future rate cuts rates lead us to believe that home sales and mortgage originations likely bottomed out in the second half of 2023 and that a gradual improvement is now underway,” Doug Duncan, Fannie Mae senior vice president and chief economist, said.

“We expect mortgage rates to dip below 6% by year-end 2024 and for homebuilders to continue to add new supply, both of which should aid affordability. Additionally, the decline in mortgage rates is likely to push refinancing volumes upward, along with some pickup in purchase financing. However, even at less than 6 percent, we think rates will still have a significant way to go in order to meaningfully reduce the ‘lock-in effect’ experienced by homeowners who refinanced or bought during the pandemic. Overall, we expect 2024 to be a better year than 2023 for homebuyer affordability and the mortgage industry.”

© 2024 Florida Realtors®

Source: floridarealtors.org

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Minority-owned banks and credit unions, classified as Minority Depository Institutions (MDIs) by government agencies, are financial institutions where most board members or stockholders are people of color.

MDIs play a crucial role in helping underserved communities. While such institutions don’t solely lend to minorities, they tend to provide more loans and accounts to minority communities than non-minority-owned banks do, according to data from the Federal Deposit Insurance Corp. This is particularly important because members of minority communities, like African Americans, often lack access to financial services and are typically underserved by financial institutions.

Supporting Black-owned or Black-led financial institutions and lenders by doing business with them can help minority communities economically.

Black-owned and Black-led auto lenders

Note that the lenders are listed alphabetically.

Primary location(s): Chicago, Illinois

Good for: Individuals who live in Chicago’s South Side community. The bank’s website notes that it aims to serve communities outside of Chicago, in Illinois and nationwide, in the future.

Methodology: We created this index of auto lenders based on lists of “minority depository institutions,” or MDIs, from the Federal Deposit Insurance Corp. and the National Credit Union Administration. The FDIC considers a bank or financial institution to be a MDI if at least 51% of its stockholders are “minority individuals” or most of its board of directors and the community it serves are minorities. The NCUA considers a credit union to be a MDI if more than 20% of its current members, board members and community it serves are Asian American, Black American, Hispanic American or Native American.

Note that this is not an exhaustive list.

Source: nerdwallet.com

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The United States Congress passed new legislation extending a tax provision that allows homeowners to deduct the cost of mortgage insurance premiums from their federal income tax returns through 2010.

“This legislation has the potential to help thousands of low- and moderate-income Americans secure affordable mortgages that keep them in their homes and keep their communities strong,” Steve Smith, Chief Executive Officer of The PMI Group, Inc. and PMI Mortgage Insurance Co., said in a press release.

“The median home price in the United States today is over $200,000, which means borrowers would need to save more than $40,000 in order to make a traditional down payment of 20 percent. Making the cost of mortgage insurance tax deductible for qualified borrowers creates opportunities for more Americans to secure safe, predictable mortgage loans with a down payment of as little as 3 to 5 percent,” Smith added.

The cost of mortgage insurance first became tax deductible for transactions, such as home purchases and mortgage refinances, closed in 2007.

Borrowers with adjusted gross incomes below $100,000 were able to deduct 100 percent of their mortgage insurance premiums paid between January 1 and December 31, 2007, while families with incomes up to $109,000 were eligible for a partial deduction.

“On average, this annual tax break amounts to $350 per taxpayer. That’s cash in the pockets of hard working homeowners,” said Kevin Schneider, president of the U.S. mortgage insurance business for Genworth Financial, Inc, in a statement.

The legislation is part of the Mortgage Forgiveness Debt Relief Act of 2007 approved by both the U.S. House of Representatives and the U.S. Senate, and now goes to President Bush for final approval.

Source: thetruthaboutmortgage.com

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Last month, DataDigest explored market experts’ expectations for 2024, with the consensus calling for a moderately better housing market than 2023.

But a meeting of the Federal Open Market Committee the following week set off a market frenzy over expectations of interest rate cuts, moving mortgage rates down well ahead of experts’ forecasts and prompting a subsequent DataDigest that asked whether the picture for 2024 had changed.

On Jan. 18, Fannie Mae weighed in: yes.

Fannie Mae’s latest monthly forecast for the housing market predicts much lower mortgage rates than its December forecast — and thus more home sales and mortgage originations.

Mortgage rates, which dropped precipitously the week of the FOMC meeting, are key to Fannie Mae’s rosier view of the road ahead in 2024. Fannie Mae’s quarterly rate forecasts this month were far lower than last month’s and were its lowest forecasts in at least six months.

“Following the Fed ‘pivot’ in December, an anticipation of more dovish policy, and the recent decline in interest rates, our mortgage rate forecast has been revised meaningfully lower this month,” Fannie Mae wrote in its forecast release.

Mortgage rates have hovered around 6.7% — Fannie Mae’s December forecast for 2024’s average — since mid-December, and the company’s forecast for 2024’s average is now 6.1% with rates dropping below 6% by year end. This should prompt a “gradual recovery” in home sales and single-family mortgage origination, according to Fannie Mae Senior Vice President and Chief Economist Doug Duncan.

“Inflation’s decline and the resultant Fed pivot to signaling future rate cuts lead us to believe that home sales and mortgage originations likely bottomed out in the second half of 2023 and that a gradual improvement is now underway,” he said in a statement.

“We expect mortgage rates to dip below 6 percent by year-end 2024 and for homebuilders to continue to add new supply, both of which should aid affordability. Additionally, the decline in mortgage rates is likely to push refinancing volumes upward, along with some pickup in purchase financing.”

The company’s quarterly forecasts for existing and new homes are up significantly from its forecasts from recent months.

Its forecasts for single-family purchase and refinance originations are also above its recent forecasts, although not as dramatically higher as with home sales.

Although Fannie Mae’s outlook for 2024 is up, Duncan warned against getting too carried away.

“However, even at less than 6 percent, we think rates will still have a significant way to go in order to meaningfully reduce the ‘lock-in effect’ experienced by homeowners who refinanced or bought during the pandemic,” he said.

Traders disagree

The yield on 10-year U.S. Treasury notes — a major factor in setting mortgage rates — opened December at 4.2%. On the heels of mid-month FOMC meeting, the rate fell to a low of 3.8% on Dec. 27.

That drop has been completely erased already in 2024, with the latest rate above 4.1%.

The steep rebound was fueled in part by comments Federal Reserve Governor Christopher Waller made at a virtual event hosted by the Brookings Institution on Jan. 16. Waller said rates should be cut “methodically and carefully” and added, “I see no reason to move as quickly or cut as rapidly as in the past.”

Equity traders, too, have been skittish regarding interest-rate-sensitive stocks — the same stocks that fueled a late December stock market rally. Traders sold off stocks of real estate investment trusts and speculative tech companies last week, but share prices have rebounded so far this week.

The pullbacks signal bond and equity traders are becoming less optimistic about a March rate cut. We’ll have to wait until February’s forecast to see if Fannie Mae’s optimism holds or if traders’ skepticism spreads.

Source: housingwire.com