{"id":162248,"date":"2023-11-13T13:10:49","date_gmt":"2023-11-13T20:10:49","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=162248"},"modified":"2023-11-13T13:10:51","modified_gmt":"2023-11-13T20:10:51","slug":"mortgage-rates-11-13-2023","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/mortgage-rates-11-13-2023","title":{"rendered":"Mortgage Rates Fell Last Week as a Recession Looms\u2014Have We Turned a Corner?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/what-is-a-mortgage\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Mortgage<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;interest rates fell sharply in the first week of November following the Federal Reserve\u2019s November meeting and its decision not to raise key rates any further. After breaking the 8% threshold in October, mortgage rates have been falling for two weeks in a row.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">As of November 8, 30-year fixed mortgage rates went down by 0.25% from the previous week, according to the Mortgage Bankers Association (MBA) weekly survey. MBA data showed average 30-year mortgage rates at 7.61%, as opposed to 7.86% on November 1 and 7.9% on October 25.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Daily data from&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.mortgagenewsdaily.com\/mortgage-rates\/30-year-fixed\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Mortgage News Daily<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;shows that 30-year rates have risen to 7.63% as of November 13. Rates were as low as 7.32% as of November 3.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Mortgage rates have been climbing steadily since late August, but the latest downward trend could be an indicator that rates will continue going down. However, because the mortgage rate decrease is coinciding with rising unemployment, it could also be an early sign of a looming\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/on-the-market-146\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">recession<\/span><\/a><span data-preserver-spaces=\"true\">.\u00a0<\/span><\/p>\n\n\n\n\n\n\n  <div class=\"lg:block\" x-data=\"{ ad_block_block_655280c81c3fd: popAds(1) }\">\n      <template x-for=\"ad in ad_block_block_655280c81c3fd\">\n        <a\n          :href=\"ad.linkURL\"\n          class=\"no-underline text-black\"\n          x-on:click=\"adClicked('https:\/\/www.biggerpockets.com\/blog\/mortgage-rates-11-13-2023', ad.sponsor, ad.title, ad.id, 'blockAdClicked', 'blockAd', '')\"\n          target=\"_blank\">\n          <div\n            class=\"py-4 border-b flex flex-col flex-nowrap text-sm border-t px-0 rounded-none\"\n            x-init=\"\n              analytics.track('blockAdLoaded', {\n                referrer: 'https:\/\/www.biggerpockets.com\/blog\/mortgage-rates-11-13-2023',\n                sponsor: ad.sponsor,\n                ad_title: ad.title,\n                ad_page_location: ''\n              })\n            \"\n            x-intersect:enter.once=\"adViewed('https:\/\/www.biggerpockets.com\/blog\/mortgage-rates-11-13-2023', ad.sponsor, ad.title, ad.id, 'blockAdViewed', 'blockAd', '')\">\n            <div><span class=\"text-xs text-slate-light block bg-slate-50 p-1 inline-block rounded-md\">Sponsored<\/span><\/div>\n            <div class=\"flex items-center text-sm space-x-4\">\n                <img :src=\"ad.imageURL\" :alt=\"ad.imageAlt\" class=\"h-10 w-10 object-cover rounded-full\">\n\n                <div clas=\"text-sm\">\n                    <span class=\"font-bold block\" x-text=\"ad.sponsor\"><\/span>\n                    <span class=\"text-slate\/80\" x-text=\"ad.description\"><\/span>\n                <\/div>\n            <\/div>\n\n            <div>\n                <span class=\"font-bold\" x-text=\"ad.title\"><\/span>\n                <p class=\"mt-2 text-slate\/80\" x-text=\"ad.body\"><\/p>\n                <span class=\"mt-2 text-themeBlue block mt-2 underline\" x-text=\"ad.linkTitle\"><\/span>\n            <\/div>\n          <\/div>\n        <\/a>\n      <\/template>\n  <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Will Rates Continue Going Down?<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Economists are now confidently predicting that&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/fomc-meeting-november-2023\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">the Fed will not hike rates anymore this year<\/span><\/a><span data-preserver-spaces=\"true\">. In fact, several have weighed in with predictions of a rate easing at some point in spring 2024. The confidence comes from the fact that the current downward trend in mortgage rates is the direct result of rising unemployment levels.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">It appears that the Fed\u2019s strategy\u2014a combination of tightening measures and letting the labor market rebalance itself\u2014is beginning to come to fruition. Last Friday, yields on 10-year Treasury notes fell 20 points after the U.S. Bureau of Labor Statistics released its&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.bls.gov\/news.release\/empsit.nr0.htm\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Employment Situation Summary<\/span><\/a><span data-preserver-spaces=\"true\">. Unemployment is edging closer to 4%, and while at 3.9%, unemployment levels in October weren\u2019t much different from the 3.8% in September, the comparison with April 2023 is more stark\u2014showing a 0.5% increase in unemployment rates.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">A sustained softening of the labor market is exactly what the Fed has been looking for, and it\u2019s the most reliable indicator that there are unlikely to be any further rate hikes this year, with a possibility of rate cuts next year. Ian Shepherdson, chief economist at&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.pantheonmacro.com\/documents\/us-documents\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Pantheon Macroeconomics<\/span><\/a><span data-preserver-spaces=\"true\">, said in a note to clients: \u2018\u2019We expect no hike; the next move is likely to be an easing next spring.\u2019\u2019&nbsp; &nbsp; &nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Shepherdson reiterated this expectation in an&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.msn.com\/en-us\/money\/markets\/i-think-the-fed-will-cut-rates-by-about-1-5-next-year-pantheon-macroeconomics-ian-shepherdson\/vi-AA1jksYz?ocid=finance-verthp-feeds\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">interview with CNBC<\/span><\/a><span data-preserver-spaces=\"true\">, where he said: \u2018\u2019I think that the Fed will cut rates by about 1.5% next year.\u2019\u2019&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Shepherdson is not alone in his forecasting: Futures Markets predicts that rates will fall by 25 to 50 basis points by May 1, with a 64% probability. Goldman Sachs economists are a little more cautious but still&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.reuters.com\/markets\/rates-bonds\/goldman-sachs-pushes-its-forecast-fed-rate-cut-q4-2024-2023-09-21\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">predicting an interest rate cut<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;by the final quarter of 2024.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Of course, certain conditions will have to be met for these predictions to come true. Shepherdson made clear that this would happen only if the market saw a \u2018\u2018sustained diminishing\u2019\u2019 of pressures from wage growth and strong economic activity. He indicated that there are all the signs of a \u2018\u2019fading\u2019\u2019 of these pressures, which in turn would see a more relaxed approach from the Fed.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The trouble is, all of this slowing of wage growth and labor market activity sounds a lot like a recession. So, will we have one?<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Will There Be a Recession in 2024?<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">In truth, no one really knows if there will be a recession. The current unemployment trend could trigger the Sahm rule if it continues. The Sahm rule dictates that an economy enters a recession when a three-month unemployment average is at least 0.5% higher than the lowest levels seen in the previous 12 months. We are pretty close to reaching this threshold.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">However, as Shepherdson noted in the CNBC interview:<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em><span data-preserver-spaces=\"true\">&nbsp;\u2018\u2018This is a very weird economy. You\u2019ve got the Fed raising rates against a private sector whose finances generally look in pretty great shape. So, you\u2019ve got the Fed pushing, and you\u2019ve got the private sector kind of pushing back. Which we\u2019ve never had before. So it\u2019s very uncertain as to how the dice are going to fall.\u2019\u2019<\/span><\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Whether this unprecedented standoff tips the vigorous U.S. economy into recession remains to be seen. That said, it is worth noting, as Shepherdson has, that rising unemployment levels are not due to a slow economy but because employers are creating fewer new jobs than the number of people entering the market.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">This means that there is a \u2018\u2019decent chance,\u201d in Shepherdson\u2019s words, that the Sahm rule won\u2019t apply in the current situation. Rising unemployment levels \u2018\u2018for any reason will increase the pressure on the Fed to forego further tightening,\u2019\u2019 but they\u2019re not necessarily enough to signal a full-scale recession.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Bottom Line<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Even if we enter a recession in 2024, it\u2019s likely to be mild. Shepherdson struck a reassuring note: \u2018\u2019The private sector is not in a place where we need a big correction. It\u2019s light-years away from where we were in \u201808, but even in better shape than we were in 1990 or the recession of \u201801, and they were very mild.\u2019\u2019&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Nothing is certain, and the chances of a looming recession are 50\/50. However, it\u2019s unlikely we will enter a major, severe recession in 2024. The current contraction of the labor market is in line with what the Fed needed to help slow down inflation and may even contribute to a reduction in interest rates next year.\u00a0<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_a50fbd47c7bb5b7eb4df884ca36fd8d3\" class=\"visibility-group alignwide  hidden\">\n        \n\n<div id=\"hero-block_bcba07617f634279c4b6781735b24d3b\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size wp-block-paragraph\" style=\"font-style:normal;font-weight:800\">Find the Right Agent, Close the Best Deal<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color wp-block-paragraph\" style=\"font-size:18px\">Step #1: Use Agent Finder to match with top <em><strong>investor-friendly<\/strong><\/em> real estate agents to help you find, analyze, and close your next deal.<\/p>\n\n\n\n<div id=button-custom-event-block_550a120a514a54d58e7b3efd6cb2e0f4 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Agent Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/mortgage-rates-11-13-2023&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find an Agent<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/08\/Marketplace-Blog-Blocks-Agent-v3.png\" alt=\"investor friendly real estate agent\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color wp-block-paragraph\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/mortgage-rates-11-13-2023&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Mortgage rates fell last week for the first time in a while. Without another federal interest rate hike and recession onnthe horizon, should we expect rates to keep falling?<\/p>\n","protected":false},"author":613618,"featured_media":162251,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7383],"tags":[],"class_list":["post-162248","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/162248","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613618"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=162248"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/162248\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/162251"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=162248"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=162248"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=162248"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}