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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 56 November 2024 J O U R N A L 39% to 42%, a new survey high. The percentage of those who expected mortgage rates to go up increased from 26% to 27%. The share of those who think mortgage rates will stay the same decreased from 35% to 31%. • As a result, the net share of those who said mortgage rates will go down over the next 12 months increased two percentage points MoM to 15%, a second consecutive survey high and the highest in NHS history. • Job Loss Concern: The percentage of respondents who said they were not concerned about losing their job in the next 12 months decreased from 78% to 77%, while the percentage who said they were concerned increased by one percentage point (22%). As a result, the net share of those who said they are not concerned about losing their job decreased one percentage point MoM to 56%. • Household Income: The percentage of respondents who said their household income is significantly higher than it was 12 months ago increased from 17% to 18%, while the percentage who said their household income is significantly lower decreased from 14% to 11%. The percentage who said their household income is about the same increased from 68% to 70%. As a result, the net share of those who said their household income is significantly higher than it was 12 months ago increased 5 percentage points MoM to 8%. "Notably, housing sentiment among renters, a common source of first-time homebuyers, has improved at approxi- mately the same pace as homeowners," Palim said. "Over the last three months, the share of renters believing it's a good time to buy a home has risen from 13% to 20%, while the share expecting mortgage rates to fall has risen from 16% to 30%. While these numbers are still relatively low, we think the improvement may signal that some potential homebuyers who have been waiting for mortgage rates to come down may be closer to coming off the sidelines, despite their ongoing concerns about home prices." EFFECTS OF LOWER MORTGAGE RATES DIFFER ACROSS U.S. MARKETS N ew Realtor.com data revealed that experts anticipate that mortgage rates will remain in the low 6% level through the end of the year, with additional decreases possibly reaching the high 5% range by the following spring, in response to the Federal Reserve's announcement of a significant rate cut in September. Home- buyers who have grappled with high mortgage rates in recent years may find some relief from recently lowered rates, which could potentially encourage more homebuyers to enter the market. However, depending on how many people use mortgages, the impact of reduced interest rates will vary through- out markets. Markets that use mortgages more frequently will generally be more susceptible to fluctuations in interest rates, whereas locations where the per- centage of homeowners who own their homes outright may be less affected. The report indicates that some 84% of current mortgages have interest rates of 6% or less. Put another way, if mort- gage rates go closer to 6%, consumers should anticipate seeing more home- owners become "unlocked," particularly in areas where mortgage usage is strong. Realtor.com used the 2023 1-Year Estimate from the American Community Survey in order to comprehend the variations in the geographic impact of decreased mortgage rates. The data showed that 39.8% of homeowners in the U.S. owned homes while 60.2% of homeowners in the country had a mortgage. In actuality, fewer homeowners now have debt, which has increased the number of people who own their homes outright. In 2010, 67.2% of homes were delinquent, while the percentage of properties that were owned was 32.8%. Percentage of Homes Owned Outright Rises Amid Falling Number of Mortgaged Homes At the state level, states with higher percentages of homeowners living in mortgage-holding homes, such as the District of Columbia, Maryland, Colo- rado, Utah, and California, should see a rise in housing activity as mortgage rates decline. On the other hand, since a higher proportion of homeowners in West Virginia, Mississippi, Louisiana, New Mexico, and Arkansas own their homes outright, these states' housing markets are probably less affected by reduced rates. Top 10 States Where Mortgages Are Most Common: • District of Columbia • Maryland • Colorado • Utah • California • Massachusetts • Virginia • Rhode Island • Washington • Delaware Given the high usage of mortgages among the top 50 metros, homeowners in Washington, D.C., may be particularly vulnerable to the effects of reduced rates. In the D.C. region, specifically, some 74.7% of homeowners in 2023 occu- pied properties that were mortgaged. Overall, only 25.3% of D.C. residents were mortgage-free owners of their primary residence. The markets with the highest percentage of homeowners who have mortgages are Portland, Oregon (69.8%); Raleigh, North Carolina (72.0%); Virginia Beach (71.0%); and Denver (72.4%). Additionally, markets that have a larger percentage of outright ownership may be somewhat protected from the effects of reduced mortgage rates. Nota- bly, among the 50 largest U.S. cities, New Orleans had the highest percentage of homeowners who are outright owners (45.8%). Pittsburgh came in second with 45.2%, Buffalo, New York, with 45.2%, Miami with 43.8%, and Tampa, Florida, with 42.9%.