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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 32 January 2024 C O V E R S T O R Y be in the South or places with a lot of land? Or are they going to be in places that have zoning changes so that supply can pick up that way? There are a lot of unanswered questions. Q: Are you seeing much impact on migration patterns or where people are choosing to retire as it relates to increased severe weather events? Boesel: Florida remains one of the biggest migration areas in the U.S. It's just cheaper to live there and it's warm. I think retirees from the East Coast are always going to go to Florida, and from the West Coast, they are going to go to Nevada and Arizona. It's better for them to go where they are going to have enough services. There have long been predictions of what they call "the Silver Tsunami." Not everyone is going to retire at the same time, right? It's going to happen when the time is right for them, so it's going to be a slow trickle of retirees. Q: Are there any trends that have surprised you or that you're fascinated by that don't get covered as much as you think they should? Boesel: Investor purchases are still a big thing. When interest rates went up, we thought maybe they would slow down. They did a little bit, and then I think the investors just found another financing source. They just continue to purchase a lot of homes. Rents are going up, so if you can buy an investment home, you will get a lot of return on that because rents remain high. Q: Do you see any fluctuations on the rent front coming, or will that remain high and keep creeping up? Boesel: Just creeping up. Rents are increasing now, maybe 3%-4%, a little higher in some places, down a tiny bit in some other places. Rents are going to re- main elevated—there is no way rents are coming back down to where they were a few years ago. Jacob Channel, Senior Economist, LendingTree Channel: Jacob Channel is Senior Economist for LendingTree, where he conducts studies on a wide variety of subjects related to the U.S. housing mar- ket and provides general macroeconomic analysis. Channel joined LendingTree in 2018 as an Intern before moving into his current position as Senior Economist. His work has been featured in major publications, including the New York Times, Bloomberg, Forbes, and CNBC. He has appeared as a guest on Cheddar TV and Yahoo Finance. Q: What are the primary factors you believe will define the 2024 housing market? Channel: Let me preface this by say- ing that the things I came up with are all very interconnected. The big themes are rates, inflation, and recession—or, more specifically, a lack of a recession, just so I don't make anyone panic prematurely. Q: What do you anticipate on the rates front? Channel: Obviously, rates matter a lot, not just in terms of mortgages, but in terms of anything that you are borrow- ing. As for when the Fed will cut rates—I think some people are maybe a little too optimistic. I know some people feel there may be six rate cuts in 2024, and that cuts are going to start immediately. I'm not sure I agree with that. I think that if the Fed does cut rates, it probably won't hap- pen until the latter half of 2024. This is relevant to mortgage rates because, as we know, while the Fed doesn't directly set mortgage rates, they do influence them. With that in mind, if nothing else, a lack of further increases from the Fed should help the bond market continue to calm down. The bond market has been crazy over the past few months, but it's calmed recently, and that has put down- ward pressure on mortgage rates. If nothing else, I anticipate that mort- gage rates will stabilize and stop rising in 2024, and I do think that there is a good chance that by the end of next year—as- suming a meteor doesn't hit Manhattan— "There have long been predictions of what they call 'the Silver Tsunami.' Not everyone is going to retire at the same time, right? It's going to happen when the time is right for them, so it's going to be a slow trickle of retirees." — Molly Boesel, Principal Economist, Office of the Chief Economist, CoreLogic