What's in store for the mortgage market in 2024's second half?

Federal Reserve, election set to play leading roles

What's in store for the mortgage market in 2024's second half?

With the midway point of 2024 rapidly nearing, mortgage professionals are gearing up for a busy second half of the year – and there’s plenty of optimism in the air for an uptick in activity.

That’s despite mortgage rates remaining resolutely high throughout the year to date, with no indication yet that the Federal Reserve is in any mood to lower its key rate amid persistent inflation and a still-hot economy.

The Fed’s latest meeting, scheduled to end today, is expected to see rates remain where they are yet again as the central bank continues to await evidence that economic indicators are trending in the right direction before opting to cut.

Despite the likelihood of rates remaining high for the foreseeable future, many buyers are determined to push ahead with their homebuying plans – with or without a rate cut by the Fed, according to a prominent Virginia-based mortgage professional.

Kristi Hardy (pictured top), executive vice president, area manager and senior loan officer at Atlantic Coast Mortgage in Virginia, told Mortgage Professional America that many clients were less attuned to the news coming from the Fed than they might have been at the onset of its rate-hiking path.

“I don’t think [buyers] are as focused on it,” she said. “I really think people have come to accept the reality of where interest rates are.

“As a matter of fact, I feel like a lot of clients are just not even worried about it anymore – they’re just so desperate to get their offer accepted and to get a house that they’re really not as concerned about the Fed and the interest rates.”

Loan officers, clients remain hopeful for eventual rate cuts in 2024

Of course, that doesn’t mean the Fed’s likely path ahead isn’t a discussion point between loan officers and their clients, especially with the central bank expected to start bringing rates lower at some point before the end of the year.

“We’re all hopeful that the rates are going to come down and we do talk about that with the clients,” Hardy said. “We talk about it when we’re trying to determine how many points they should pay to buy their interest rate down. We’re all very hopeful that in a year or two, or maybe even by the end of this year, there’ll be a refinance opportunity.

“But we’re also being realistic about it too. I think everyone’s gotten used to it by now. I don’t think anyone’s shocked by the rate.”

Why the second half of 2024 could mark a big six months for the industry

The prospect of Fed rate cuts by the end of 2024 – and November’s impending presidential election – mean an eventful final six months of the year could be in the cards.

An election year “always shakes things up a bit,” Hardy said – and she remains optimistic that the final quarter of this year or the beginning of 2025 will see rates begin to dip towards the 6% mark.

“I’m extremely hopeful and I think the demand is going to remain strong for houses,” she said of her overall outlook on the market. “There are so many millennials out there and I do think that demand is going to remain strong.”

It’s no secret that activity in the US mortgage market has cooled substantially since rates began to rise in 2022 – an unsurprising development, given the barnstorming and unsustainable pace of homebuying and refinancing throughout the first two years of the COVID-19 pandemic.

That slowdown may have seen some loan officers turn their attention away from a career in the mortgage industry – but for those that have chosen to remain, there’s plenty of opportunity to grow business and market share looking ahead, according to Hardy.

“There’s a lot of loan officers that have gotten out of the business, but I personally am growing my team,” she said. “I think it’s a professional’s market – and I do think it’s a good time for professional realtors and loan officers to hire more people.

“At least, that’s what I’m doing. I’m growing my team, and my company’s growing. We’re in a growth mindset.”

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