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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 30 January 2024 C O V E R S T O R Y W ith a new year dawning, MortgagePoint assembled a panel of expert economists to provide a forecast for what we can expect from the housing market in 2024, as well as diving into what surprised them about 2023. Will interest rates continue to moderate? Will the Fed achieve the "soft landing" it's been pursuing, or will wider global in- stabilities threaten the progress made on the inflation front? Will we finally see the "lock-in effect" fading enough for home- owners who've been huddled atop their low interest rates to finally sell, returning more inventory to the market? Here's what MortgagePoint's expert panel of economists had to say. Molly Boesel, Principal Economist, Office of the Chief Economist, CoreLogic Molly Boesel is Prin- cipal Economist in the Office of the Chief Economist at CoreLogic. She is responsi- ble for analyzing and forecasting housing and mortgage market trends. She has a depth of expertise in mortgage market analysis, model development, and risk analysis in the housing finance industry. Boesel previously worked at both Fannie Mae and Freddie Mac. While at Fannie Mae, she provided Fannie Mae's official monthly forecast for the economy, hous- ing market, and mortgage market stocks and flows, and provided analyses on trends in the mortgage market, including characteristics of borrowers, homeown- ers, and mortgage products. She earned her bachelor's degree in economics from James Madison University and a master's degree in consumer economics and housing from Cornell University. Q: What are the top factors you believe will define 2024's housing marketplace? Boesel: Inflation, interest rates, and the unlocking of some housing supply will also help with affordability. A shift in interest rates will help us get "unstuck," and if rates could come down, we could have some refinancing. If inflation comes down, the Fed can stop raising rates, or ease them up a little bit sometime next year, and that will tell us what will happen with a recession. Right now, I don't know that many peo- ple are predicting a recession. If the economy does start to pick up ... we could have some demand for the purchase market, and that would be great when the supply finally does ease up. What would be nice is to have those matched up at the same time instead of going off in different directions. Some owners have been selling their homes at high prices in more expensive areas, so they can cash in on that. They can move to cheaper areas and use that cash for their new home. So, they don't necessarily need to get a mortgage. Q: What has been happening on the migration front this past year? Boesel: You also have a portion of the population that does not have to return to an office. I don't know what's going to happen there, but you'll see migration play out. If, on the other hand, you have a hybrid work situation where employees need to be near the office, some of these migration trends may slow down. CoreLogic has tracked some areas that have experienced migration trends, like Miami. It's not inexpensive but com- pared to New York City, where you had a lot of work-from-home and satellite-of- fice situations. What we saw, at least at the beginning of 2023, was people leaving more expensive areas. Seattle experienced a lot of outbound migration, as did San Francisco, San Jose, Los Angeles, and San Diego, among others. Miami was a tricky area, but I'm looking to see some cheaper areas like Kansas City and Cincinnati—some of these smaller cities. A lot of companies who are renting space or even own office space are now asking their employees to come back. Q: If we do get a soft economic landing and the economy picks back up and we have demand, when will that supply ease so that home sales will pick back up? Boesel: So, what can we do about new home sales? Are they going to all RUNNING THE NUMBERS MortgagePoint assembled a panel of economists to forecast the top trends and headwinds they expect to define the housing market in 2024. . B y DAV I D W H A R T O N D A V I D W H A R T O N , Editor-in-Chief at the Five Star Institute, is a graduate of the University of Texas at Arlington, where he received his B.A. in English and minored in journalism. Wharton has 20 years' experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has been with Five Star since 2017 and has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. He can be reached at david.wharton@thefivestar.com.