Introduction: Meet Andy Walden, a Mortgage Expert

If you are interested in the future of the mortgage market and how it may affect your financial decisions, you may want to hear what Andy Walden has to say. Walden is the vice president of enterprise research at ICE Mortgage Technology, a leading provider of software solutions for the mortgage industry. He has over 15 years of experience in analyzing and forecasting the trends and dynamics of the housing and mortgage markets. In this article, he shares his outlook on the mortgage demand for 2024, based on the latest data and projections from ICE and other sources. He also offers some practical insights and tips for homebuyers and homeowners who are looking to take advantage of the changing market conditions.

How Mortgage Rates Have Changed in 2023 and Why

Mortgage rates have been on a roller coaster ride in 2023, reaching record highs and lows in a matter of months. The average rate for a 30-year fixed-rate mortgage started the year at 6.31%, according to Freddie Mac, and peaked at 7.79% in October, the highest level since 2011. The main reason for this surge was the anticipation of the Federal Reserve’s tapering of its bond-buying program, which has been supporting the economy and keeping interest rates low since the pandemic. The Fed announced in November that it would start reducing its monthly purchases of Treasury and mortgage-backed securities by $15 billion, starting in December, and gradually end the program by mid-2024.

However, mortgage rates have also dropped significantly in the last two months of 2023, reaching 6.95% in December, the lowest level since May. This was due to a combination of factors, such as the emergence of the Omicron variant of COVID-19, which raised concerns about the global economic recovery, the easing of inflation pressures, and the increased demand for safe-haven assets like bonds. As bond prices rise, bond yields and mortgage rates fall.

What to Expect for Mortgage Rates in 2024, According to Walden

Walden expects mortgage rates to continue to decline in the first half of 2024, reaching as low as 5.65% by December. He bases his prediction on the assumption that the Fed will maintain its current pace of tapering and raise its benchmark interest rate only once in 2024, by 0.25%, in the fourth quarter. He also expects the inflation rate to moderate and the economic growth to slow down, as the effects of the fiscal stimulus fade and the supply chain disruptions persist. He believes that these factors will keep the demand for bonds high and the mortgage rates low.

However, Walden also warns that there are some risks and uncertainties that could affect his forecast, such as the evolution of the pandemic, the geopolitical tensions, and the policy changes. He advises borrowers and lenders to be prepared for any possible scenarios and to monitor the market conditions closely.

How Mortgage Demand Will Respond to Lower Rates and Higher Inventory

Walden anticipates that the lower mortgage rates will stimulate the mortgage demand in 2024, especially for refinancing. He estimates that the refinance volume will increase by 15% in 2024, compared to 2023, as more homeowners will be able to benefit from the rate reduction and save money on their monthly payments. He also expects that the purchase volume will grow by 10% in 2024, as more homebuyers will enter the market, taking advantage of the lower rates and the higher inventory.

According to Walden, the housing inventory will improve in 2024, as more homeowners will decide to sell their homes, either to cash out their equity or to relocate to more affordable areas. He also expects that the new construction activity will pick up, as the builders will overcome some of the challenges they faced in 2023, such as the labor and material shortages, the regulatory hurdles, and the rising costs. He projects that the housing supply will increase by 8% in 2024, compared to 2023, easing some of the pressure on the home prices.

How to Prepare for Buying or Refinancing a Home in 2024

Walden offers some tips and advice for people who are planning to buy or refinance a home in 2024, based on his outlook and experience. Here are some of his suggestions:

• Shop around for the best mortgage deal. Walden recommends that borrowers compare the rates and fees from different lenders, using online tools and platforms, such as ICE Mortgage Technology’s Encompass Consumer Connect, which allows borrowers to apply for loans, upload documents, and track their progress from any device. He also suggests that borrowers check their credit scores and reports, and improve them if needed, to qualify for the best rates and terms.
• Lock in the rate as soon as possible. Walden advises that borrowers lock in the rate as soon as they find a suitable offer, to avoid the risk of losing it due to market fluctuations. He also recommends that borrowers ask for a rate lock confirmation in writing, and review the terms and conditions carefully, to avoid any surprises or fees.
• Be flexible and patient. Walden acknowledges that buying or refinancing a home can be a stressful and time-consuming process, especially in a volatile and competitive market. He encourages borrowers to be flexible and patient, and to work with a trusted and experienced loan officer, who can guide them through the process and help them overcome any challenges or obstacles.

Conclusion: Key Takeaways from Walden’s Outlook

Walden’s outlook on the mortgage demand for 2024 is optimistic and realistic, based on the data and projections from ICE and other sources. He expects that the mortgage rates will decline in 2024, as the Fed will be cautious and gradual in its monetary policy, and the inflation and economic growth will moderate. He also expects that the mortgage demand will increase in 2024, as more homeowners will refinance their loans and more homebuyers will purchase their homes, taking advantage of the lower rates and the higher inventory. He also offers some practical tips and advice for people who are planning to buy or refinance a home in 2024, such as shopping around, locking in the rate, and being flexible and patient.

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