Year End Mortgage interest rate update- 12/27/2024

Friday, 12/27/2024 – Below is the weekly mortgage interest rate update from the Nordby Team.

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Fed Meeting:

Last week, the Fed announced another 25-bps (.25%) rate cut. This cut had already been baked into bond markets, so the market reaction was not to the announcement but to Jay Powell’s post-meeting press conference. Powell maintained that the economy is a strength moving into the new year and that the Fed will be cautious about further rate cuts. A standout topic was what the Fed considers to be the “neutral rate” that the committee is targeting, without a definitive answer of what that rate will be. The new Federal Funds rate is 4.25%-4.50%. After the Fed meeting, projections for rate cuts in 2025 dropped from 4 to 2.

Personal Consumption Expenditures (PCE)

PCE is the preferred metric for tracking inflation. November’s reading showed 0.1% growth, less than the 0.2% expert prediction. Year-over-year growth was 2.4%. The core reading, which removes volatile food and energy data, similarly showed 0.1% growth. Year-over-year growth in the core reading was 2.8%. Consumer spending remains elevated, with standout figures for spending on cars, financial services, recreational goods, and health care.

Please take a look at the conditions below. APR = Annual Percentage Rate.
Your actual rate, payment, and costs could be higher. You can get an official Loan Estimate before choosing a loan. The advertised monthly payment is for illustrative purposes only and assumes the above sales price and borrower qualification. Rates above reflect 30-day pricing, primary occupancy, and a 780 FICO. Some rates may include up to 1 discount point as an upfront cost to borrowers. Rates, terms, and availability of loan programs are subject to change without notice. Rate and APR will vary based on points, loan amount, loan-to-value, borrower’s credit, property type, and occupancy—minimum credit score required. I don’t think it’s a commitment to lend. For informational purposes only, this isn’t meant to be legal, tax, or financial advice. Monthly payment includes only estimated principal, interest, taxes, insurance, and estimated mortgage insurance premium, when applicable. Loan programs are subject to underwriting guidelines, which are subject to change without notice and limit 3rd party contributions and occupancy status in the home.
^* For government programs, the actual loan amount is higher due to upfront mortgage insurance added into