Falling Mortgage Rates Lead to Rebound in Housing Market Activity, But Recovery Expected to be Gradual

Mortgage rates have fallen sharply in recent weeks, leading to a rebound in mortgage applications and new home listings.

The declines in mortgage rates are due to the Federal Reserve signaling future interest rate cuts to support the economy.

Lower rates are making homes more affordable again after reaching multi-decade highs in late 2022.

However, headwinds like low inventory, high prices, and existing homeowners with low rates will limit the pace of the housing recovery.

The cooling housing market and potential rebound in 2024 bodes well for companies like Fannie Mae, Freddie Mac, and Redfin.