As we wrap up the Christmas weekend and head toward New Year’s, this is always a very quiet time for lenders like Orion, our brokers, and the financial markets. Nonetheless, the stock market has been in the headlines lately, and although stocks and bonds (which impact mortgage rates) don’t always move together, it is interesting to check in with both markets as we head toward year-end.

Last Friday U.S. stocks ended largely higher, with market participants looking ahead to the long Christmas holiday weekend. Everyone has watched the stock markets extendits amazing “bull run” to eight straight weeks… But it is important for your clients to understand why, and it is a good way for our brokers to add value over the internet.

Stock market investor sentiment last week was helped by favorable economic data, capped by the Federal Reserve's favorite inflation gauge coming in less than expected. The November core personal consumption expenditures (PCE) price index rose by just 0.1 percent from October and was up 3.2 percent from a year ago. Those figures are low enough to support the belief that inflation is in a downward trajectory and the Federal Reserve will lower benchmark interest rates in 2024.

Brokers know that it is that kind of thinking that is driving mortgage rates, as well as other interest rates, lower while simultaneously raising stock prices as stocks tend to do better in a lower rate environment. Inflation has been coming down, the Fed’s goal, while unemployment is still low, and the economy is doing well.

What are the “experts” thinking about the scene in 2024? Orion saw that Freddie Mac sent out its outlook. The company’s economists believe that economic growth will be lower than 2023, unemployment higher (stop me if you’ve heard this before), and mortgage rates are expected to be in the 6-7 percent range during the year.

Freddie thinks that home prices will rise more than 6 percent, fine news for your clients. For the tens of millions of Millennials who don’t own a home yet, for-sale inventory is expected to remain depressed, and Freddie sees a slight increase in dollar volume for purchase originations while refinancing isstagnant. Lastly, Freddie believes that the U.S. Federal Reserve will start cutting rates. All pretty safe bets.

But rates are only part of the equation for Orion. We are known for offering our products at very competitive prices while at the same time giving our clients top-notch service. And we do this regardless of the rate environment.

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