© 2024 Freddie Mac www.freddiemac.com

U.S. Economic, Housing and Mortgage

Market Outlook 

1 Bureau of Economic Analysis (BEA)

Recent developments

U.S. economy: The U.S. economy continued to grow at a seasonally adjusted annual rate (SAAR) of 3.4% in Q4 

2023 as per the third and final estimate of the Real Gross Domestic Product (GDP) closing out 2023 at 2.5% SAAR 

compared to the 2022 annual levels.1

 While growth in Q4 2023 softened compared to the 4.9% growth in Q3 

2023, it remains above estimates of long-term potential growth. The upward revisions to the third estimate for 

Q4 2023 predominately reflect an increase in consumption spending, which contributed 2.2 percentage points 

to overall growth. While government spending increased 4.6% in the third estimate compared to 4.2% in the 

second estimate for Q4 2023, government spending is moderating compared to the 5.8% increase in Q3 2023. 

Private investment increased 0.7% over Q4 compared to the 10.0% increase in Q3. Residential investment 

remained positive but slowed down from the 6.7% increase in Q3 2023 to 2.8% in Q4 2023. Private Domestic 

Final Consumption ticked down in Q4 2023 to 3.5% compared to the 3.6% growth rate in Q3 2023. Overall, 

growth is moderating and is expected to continue to trend downward through 2024. 

With the third estimate of Real GDP, the Bureau of Economic Analysis also releases the Gross Domestic Income 

(GDI) data. Real GDI increased 4.8% in Q4 compared to 1.9% in Q3 2023. The average of GDP and GDI is often 

considered a supplemental measure of U.S. economic activity, and as per that measure, growth increased 4.1% 

in Q4 as compared to the 3.4% growth in Q3 2023.

The labor market remained robust with nonfarm payroll employment increasing by 303,000 in March 2024, 

as per the Bureau of Labor Statistics (BLS). Employment for January and February was revised up by a combined 

22,000. The unemployment rate inched down from 3.9% in February to 3.8% in March, with decreases in Asian 

and Hispanic unemployment rate over the month. Unemployment remains below 4% for the 26th consecutive 

month, the longest streak since the 1960s. Average hourly earnings for all employees on private nonfarm payrolls 

rose 0.3% month-over-month, and compared to a year ago, average hourly earnings increased 4.1%. Overall, 

the jobs report is indicative of a resilient labor market signaling the likelihood of continued support for 

consumption spending and thereby, for economic growth. 

U.S. ECONOMY

While economic growth has moderated 

slightly, the labor market remains resilient 

with the unemployment rate remaining 

below 4% for the 26th consecutive month, 

the longest streak since the 1960s.

HOUSING & MORTGAGE MARKET 

Housing demand is on the rebound, but 

with mortgage rates still averaging 6.8%, 

many prospective homebuyers continue 

to be priced out of the market.

SPOTLIGHT: SPRING HOMEBUYING

A preview of the spring homebuying season 

shows a healthy recovery compared to last 

year and first-time homebuyers continue to 

carry demand, making up almost 6 out of 10 

purchase applications. MORE 

APRIL 2024 IN THIS ISSUE:
U.S. Economic, Housing and Mortgage Market Outlook | April 2024 2

Job openings remained steady at around 8.8 million in February 2024, according to the BLS Job Openings 

and Labor Turnover Survey (JOLTS). The ratio of job openings to unemployed, a metric that the Federal Reserve 

has been tracking to gauge the strength of the labor market, declined slightly to 1.36 in February from a revised 

reading of 1.43 in January, indicating fewer job openings per unemployed. While on average there are more 

job openings than unemployed at the national level, there is substantial variation in this ratio across the 

states. For example, as of January, the latest available state-level data, California, Arizona, New Jersey, and 

Washington, had more unemployed than job openings while states such as Maryland and North Dakota 

had more than three jobs per unemployed person in the state.

Inflation as measured by the price index for Personal Consumption Expenditures (PCE) excluding food and 

energy came in below consensus expectations, increasing 0.3%. This brought the annual core PCE rate down 

to 2.8% from 2.9% in February. However, the overall level of inflation remains above the Federal Reserve target 

of 2.0% with significant upside risks. With inflation remaining above the target, the likelihood of the Federal 

Reserve cutting the federal fund rates is pushed further out to the second half of the year. Following the March 

CPI report, market expectations of the federal fund rate cuts also fell significantly.2

The higher interest rates are 

impacting consumer credit 

performance. While serious 

delinquency rates for credit 

cards and autos are increasing, 

mortgage performance has 

remained better than the other 

sectors (Exhibit 1). Credit cards 

have had the highest increase 

in transitions into serious 

delinquency, followed by auto 

loans. As a result of higher for 

longer rates and sticky inflation, 

consumers are relying more on 

credit card debt and consequently, 

transitions into delinquency 

are above levels seen prior to 

the pandemic.

In summary, the U.S. economy 

has changed little in recent 

months and remains resilient. 

Economic growth has moderated 

but remains robust, the labor 

market continues to exhibit 

strength, and inflation remains 

elevated relative to the Federal 

Reserve’s long-run target.

2 CME FedWatch Tool - CME Group: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

EXHIBIT 1

Transition into serious delinquency (90+), by loan type 

Note: Student loan data are not reported prior to 2004 due to uneven reporting

Source: New York Federal Reserve Consumer Credit Panel/Equifax 

0%

2%

4%

6%

8%

10%

12%

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

Auto CC Mortgage HELOC Student Loan
U.S. Economic, Housing and Mortgage Market Outlook | April 2024 3

U.S. housing and mortgage market: As we enter the spring homebuying season, there is renewed attention 

on the housing market as this season largely determines how the year will turn out for the housing market. 

On average, since 1999, around 36% of the total home sales in a year happen between the months of March 

to June. Warmer weather and the end of the school year prompt many to make the home purchase move during 

this period as compared to any other time of the year. With affordability at a near 30-year low, heightened 

mortgage rates, and no March rate cut, what does this mean for the 2024 spring home buying season? 

We will explore more forward-looking data in the spotlight section below.

Leading up to the spring homebuying season, total (existing + new) home sales for the month of February 

2024 moved up by 8.1% from January 2024, but were down 2.2% from a year ago. Existing home sales grew 

9.5% from January to 4.38 million in February and accounted for about 87% of total home sales. Despite the 

month-over-month gains, existing sales are still 3.3% below the levels of February 2023. New home sales for 

February 2024 were at 662,000, 0.3% below January sales, but 5.9% higher than last February. As the supply 

of existing homes for sale remains low and home prices continue to rise, more buyers are choosing to purchase 

new homes than in previous years. 

The FHFA Purchase-Only Home Price Index for January ticked down by 0.1% month-over-month compared to 

an increase of 0.1% in December 2023. However, with housing demand on the rebound, year-over-year, house 

price growth remained strong at 6.3% for January. 

New residential construction bounced back in February with total starts increasing 10.7% in February, the largest 

monthly increase since May 2023. Single-family housing starts were up 35.2% year-over-year in February with 

single-family housing permits increasing 29.5% over the same period.3

 As demand for new homes continues to 

increase, builders reap the benefits. According to the National Association of Home Builders’ Housing Market 

Index, homebuilder confidence continued its upward trend in March with the index coming in at 51. This is the 

highest reading since July 2023 and is above the threshold of 50, indicating positive building conditions.4

Mortgage rates remained steady in March and averaged 6.8% for the month, as measured by Freddie Mac’s 

Primary Mortgage Market Survey®. According to the Mortgage Bankers Association (MBA), mortgage activity 

increased over the month despite these higher rates. Overall mortgage activity was up 3.9% month-overmonth but was down by 10.2% year-over-year at the end of March. Refinance activity for March was up 5.9% 

as compared to February, and purchase applications were up 3.2% month-over-month.

While the overall impact of higher interest rates on mortgages has been lower than on consumer credit, 

we see a slight uptick in mortgage delinquency rates. Even with this increase, the delinquency rates remain 

lower than historical averages for most loan types. Total mortgage delinquency rates increased in Q4 2023 

to 3.9%, up 26 basis points from Q3 2023. According to the Mortgage Bankers Association (MBA), there 

has been an uptick in the pace of new mortgage loans entering delinquency coupled with other mortgage 

loans moving into later stages of delinquency. The delinquency rate on conventional mortgages increased 

from 2.5% in Q3 2023 to 2.6% in Q4 2023. The delinquency rate on FHA loans increased from 9.5% in Q3 

2023 to 10.8% in Q4 2023. The delinquency rate on VA loans had the largest increase, up 31 basis points 

to a rate of 4.1% in Q4 2023.

Overall, tight inventory is still a key barrier to home sale volumes. Purchase demand is improving, but with 

mortgage rates still averaging 6.8%, many prospective homebuyers are being priced out of the housing market.

3 https://www.census.gov/

4 https://www.nahb.org/
U.S. Economic, Housing and Mortgage Market Outlook | April 2024 4

Outlook 

Our view on the economy holds steady as we step into Q2 2024. We expect the U.S. economy to realize a 

slow growth this year. Households accumulated a considerable amount of pandemic-related excess savings 

which helped them withstand the high inflationary environment of the last couple of years. While we expect 

inflation to moderate eventually, substantial savings are already drawn down, which could lead to a softening 

of the spending momentum, slowing the economy and the labor market. While a lot of headway towards the 

2% inflation target has been made, the Federal Reserve is in a “wait and see” mode before they start cutting 

the federal fund rates. We therefore expect mortgage rates to remain elevated for longer. 

Under our baseline scenario, our housing outlook, particularly for home sales, remains subdued. While 

housing demand is solid due to a large share of Millennial first-time homebuyers looking to buy homes, they 

are challenged by high mortgage rates and a lack of homes available for sale. We expect these challenges to 

persist in 2024 mainly in the absence of significant rate cuts, which will keep the rate-lock effect in place and 

keep total home sales volume below five million in 2024. Due to solid housing demand but lean inventory, 

we expect upward home price pressure and forecast home prices to increase 0.5% in 2024 and in 2025. 

In the mortgage market, we expect to see some increase in dollar volumes of mortgage origination in 2024 

largely driven by higher home prices. However, subdued home sales will limit the purchase origination dollar 

volumes. Additionally, a high share of cash purchases will also impede purchase origination volumes. On the 

refinance side, unless the mortgage rates drop significantly and unlock rate-locked homeowners, refinance 

volumes will remain low. Since we do not expect mortgage rates to fall significantly this year, refinance activity 

will remain constrained, keeping total originations low for 2024. 

Overall, our outlook remains positive. However, as inflation remains a fundamental piece in halting the Federal 

Reserve’s rate cuts, risks are weighted to the downside. Consumers have started to feel the brunt of high rates 

as indicated by deteriorating credit performance, particularly in auto and credit card segments. In the absence 

of rate cuts, the weakening in non-mortgage performance will continue and might spill over to mortgage 

performance. However, under our baseline, we do not expect this scenario to occur.
U.S. Economic, Housing and Mortgage Market Outlook | April 2024 5

APRIL 2024 SPOTLIGHT: 

The 2024 spring homebuying season: An early preview using 

mortgage application data

The 2023 spring homebuying season was indeed sluggish, as a large number of homebuyers sifted through 

tight housing markets within the high-rate, low-inventory environment. According to data from the National 

Association of Realtors (NAR) and the U.S. Census Bureau, 2023 had the lowest total home sales for the spring 

season (March through June) since 2011 (Exhibit 2). What about the 2024 spring homebuying season? Looking 

at our unique, real-time Loan Product Advisor® (LPA) data, we can get an early pulse of where the housing 

market is headed.

EXHIBIT 2

Total home sales

Thousands, NSA

Source: National Association of Realtors, U.S. Census Bureau

Overall, housing demand is making a healthy recovery compared to last year. As shown in Exhibit 3 (following 

page), year-to-date (through March 31st), purchase applications for 30-year fixed-rate purchase mortgages 

are up 8% from the same period last year, even as the median mortgage rate and median sales price have 

increased. First-ime homebuyers continue to carry demand so far this year as they make up almost 6 out of 10 

purchase applications. Nonetheless, the median payment (principal and interest) is up 7% from the same period 

last year, and that continues to be a significant headwind as affordability remains near historic lows.

Spring (March through June) Rest of year

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1.78 M
U.S. Economic, Housing and Mortgage Market Outlook | April 2024 6

EXHIBIT 3

Purchase application year-to-date summary table 

Metric YTD 2017 YTD 2018 YTD 2019 YTD 2020 YTD 2021 YTD 2022 YTD 2023 YTD 2024

Purchase Applications (YoY Growth) 4% -6% 17% 17% 57% 2% -13% 8%

Median Mortgage Rate 4.38% 4.50% 4.50% 3.63% 2.99% 3.99% 6.38% 6.63%

Median Sales Price $260,000 $267,000 $280,000 $302,500 $355,000 $400,000 $390,000 $400,000 

Median Payment $1,121 $1,177 $1,232 $1,194 $1,275 $1,609 $2,021 $2,163 

First-time Homebuyer Share 56.4% 57.6% 55.1% 54.6% 56.5% 58.4% 58.5% 58.2%

Notes: YTD = Jan 1 to Mar 31; F30, purchase, owner-occupied, excludes ‘CAUTION’ credit risk rating

Source: Freddie Mac

What is driving increased demand this year? If we break out purchase applications by sales price groups, we see 

that purchase applications for higher-priced homes have rebounded more in the first three months of 2024 than 

lower-priced homes from the same period last year (Exhibit 4). 

EXHIBIT 4

Purchase application growth by price tier

Year-to-date 2024 vs. year-to-date 2023

Note: Purchase, owner-occupied, excludes ‘CAUTION’ credit risk rating

Source: Freddie Mac

1.9%

3.0%

3.1%

7.5%

3.5%

11.1%

22.3%

47.6%

63.7%

≤ $200K

$200K – $300K

$300K – $400K

$400K – $500K

$500K – $600K

$600K – $700K

$700K – $800K

$800K – $900K

$900K – $1M

-4.6%

> $1M
U.S. Economic, Housing and Mortgage Market Outlook | April 2024 7

Furthermore, there is significant growth in purchase demand for homes with sales prices above $800,000. Given 

the current lack of inventory, it appears that people have no choice but to search in the higher price points for their 

homes and those at the margin are priced out.

We can also look at where housing demand is growing. Geographically, purchase demand growth is spread 

throughout the country, but the most considerable growth is coming out of midwestern and southern states 

such as South Dakota, Mississippi, Arkansas, and Oklahoma. However, some markets that led demand in 

previous years (e.g. Florida and Arizona) appear to be moderating, implying that the rate lock-in effect and high 

home prices are starting to take their toll on these hot markets (Exhibit 5).

EXHIBIT 5

Purchase application growth by state 

Year-to-date 2024 vs. year-to-date 2023

Note: Purchase, Owner-occupied, Excludes ‘CAUTION’ Credit Risk Rating

Source: Freddie Mac

CA

7.1%

OR

-0.8%

WA

3.1%

MT

10.5%

MN

14.5%

NC 5.8%

CO

4.6%

ID

2.7%

NV

6.1% UT

7.5%

AZ

3.3%

AK

-1.1%

TX

5.4%

FL

0.8%

VA

7.7%

NY

-4.8%

ND

15.3%

IA

8.9%

MO

13.2% KY

14.5%

TN 11.7%

DC 7.7%

MD 0.3%

HI

23.1%

VT

4.2%

CT 0.4%

DE 4.5%

AR

19.8%

LA

4.5%

NM

12.2%

GA

0.5%

SC

8.5%

PA

2.3%

ME

31.1%

WV

9.9%

WY

1.8%

SD

28.1%

NE

12.1%

KS

8.3%

OK

20.4%

MA 9.6%

NJ 3.0%

MS

19.4%

IL

9.5%

WI

15.3% MI

10.6%

IN

6.8%

OH

12.1%

AL

9.8%

RI 3.6%

NH

14%

< 0%

0% to 7%

7% to 14%

≥ 14%

2024 YTD vs 2023 YTD

Percent change
U.S. Economic, Housing and Mortgage Market Outlook | April 2024 8

The affordability issue remains a primary concern in the housing market and poses significant risks to demand. 

Using our LPA data, we can track how monthly payments (principal and interest) have increased over the same 

period last year. Exhibit 6 breaks out the growth in median principal and interest payments geographically. 

The markets that show the highest payment growth are in the midwestern and northeastern regions. These 

potential homebuyers will have to pay out significantly more money every month compared to last year.

EXHIBIT 6

Median principal and interest monthly payment growth by state 

Year-to-date 2024 vs. year-to-date 2023

Note: F30, Purchase, Owner-occupied, Excludes ‘CAUTION’ Credit Risk Rating

Source: Freddie Mac

We also looked at how the principal and interest paid by borrowers vary by metro. Specifically, we looked 

at 25 of the largest housing markets to understand how spread out a typical payment within the market 

has been in the first three months of 2024.5 Exhibit 7 (following page) shows that markets like Detroit, 

Minneapolis, and Houston have somewhat narrower distributions of payments, whereas metros like New York, 

Washington D.C., and Los Angeles have broader distributions. The wider distribution means those housing 

markets are much more heterogeneous even within their respective metro limits.

5 Top 25 markets with the most F30 purchase applications in LPA year-to-date.

FL

8.1%

CA

9.3%

OR

5.2%

WA

7.6%

MT

4.8%

MN

4.6%

NC 7.7%

CO

5.6%

ID

6.5%

NV

8.4% UT

9.3%

AZ

7.8%

AK

5.6%

TX

4.4%

VA

8.2%

NY

11.7%

ND

5.4%

IA

7.3%

MO

7.5% KY

11.5%

TN 10.8%

DC 10.4%

MD 9.5%

HI

8.3%

NH

VT 13.9%

11.4%

CT 16%

DE 10%

AR

5.3%

LA

3.1%

NM

10.5%

GA

7.9%

SC

8.3%

PA

6.4%

ME

9.1%

WV

3.8%

WY

1.8%

SD

11.4%

NE

10.9%

KS

11.3%

OK

3.2%

MA 14.8%

NJ 14.8%

MS

7.9%

IL

7.6%

WI

11.3% MI

10.6%

IN

7.8%

OH

10.6%

AL

6.9%

RI 13.7%

< 5%

5% to 7.5%

7.5% to 10%

≥ 10%

2024 YTD vs 2023 YTD

Percent change
U.S. Economic, Housing and Mortgage Market Outlook | April 2024 9

EXHIBIT 7

Principal and interest monthly payment distribution by core based statistical area (CBSA) 

Year-to-date 2024

Note: F30, Purchase, Owner-occupied, Excludes ‘CAUTION’ Credit Risk Rating

Source: Freddie Mac

This year’s spring homebuying season has started strong. Looking at our internal application data, we see 

demand has improved from last year despite the challenging homebuying environment. However, there is still 

much uncertainty related to broader affordability problems and how that will impact real estate transactions. 

Nonetheless, demand for homes seems unabated so far in the first three months of 2024, and that momentum 

may very well continue throughout the spring homebuying season.

Detroit-WarrenDearborn, MI

Chicago-NapervilleElgin, IL-IN-WI

Houston-The WoodlandsSugar Land, TX

Jacksonville, FL

Minneapolis-St. PaulBloomington, MN-WI

Philadelphia-CamdenWilmington, PA-NJ-DE-MD

Tampa-St. Petersburg 

Clearwater, FL

Charlotte-ConcordGastonia, NC-SC

Atlanta-Sandy SpringsAlpharette, GA

Baltimore-ColumbiaTowson, MD

Orlando-KissimmeeSanford, FL

Dallas-Fort WorthArlington, TX

Las Vegas-HendersonParadise, NV

$1K $2K $3K $4K

Monthly principal & interest

$1K $2K $3K $4K $5K $6K $7K

Monthly principal & interest

$5K $6K $7K

Phoenix-MesaChandler, AZ

Austin-Round RockGeorgetown, TX

Miami-Fort LauderdalePompano Beach, FL

Portland-VancouverHillsboro, OR-WA

Sacramento-RosevilleFolsom, CA

Washington-ArlingtonAlexandria, DC-VA-MD-WV

Denver-AuroraLakewood, CO

Riverside-San BernardinoOntario, CA

New York-NewarkJersey City, NY-NJ-PA

Boston-CambridgeNewton, MA-NH

Seattle-Tacoma, 

Bellevue, WA

Los Angeles-Long BeachAnaheim, CA

% of pmts: 50% 80% 95% Distribution of pmts. Median Natl. median

Prepared by the Economic & Housing Research group

Sam Khater, Chief Economist

Len Kiefer, Deputy Chief Economist

Ajita Atreya, Macro & Housing Economics Manager

Rama Yanamandra, Macro & Housing Economics Manager

Penka Trentcheva, Macro & Housing Economics Senior

Genaro Villa, Macro & Housing Economics Senior

Jessica Donadio, Finance Analyst

www.freddiemac.com/research

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