Despite overall stability in national home prices, the U.S. mortgage market has faced a significant downturn since mid-2022. Americans, especially first-time homebuyers, have been grappling with rising home prices. On the other hand, American homeowners hold a record $32.7 trillion in home equity, and, of those who are still paying a mortgage, 63% carry an interest rate below 4%. To gain insight into the current state and future of the mortgage market, the ResiClub blog spoke with Jeff DerGurahian, chief investment officer and head economist at loanDepot. When looking ahead, DerGurahian says the market should begin to stabilize by 2025, bringing a sense of relief to the housing market.
“Right now, while home values continue to rise in some markets, they are falling in others, leading to increased inventory across the country. When interest rates begin to drop, we can expect more buyers who have been waiting on the sidelines to enter the market. This will create more demand and likely lead to higher home values. However, this added demand will continue to strain the existing inventory.”
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