Mortgage rates have plateaued around 6.5-7% in early 2024, and that stability is exactly what the market needed. After a volatile 2023 where rates swung from 6.5% to 7.5% and back, predictable rates are bringing buyers and refinancers back into play.
What Stabilization Means
From January through late 2023, rates climbed from 6.5% to 7.5% and back down to 6.8%. That volatility made planning almost impossible. Buyers didn't know if they should rush or wait. Sellers couldn't gauge what their home was actually worth because the financing landscape was shifting weekly.
Now, in January 2024, we're looking at a rate environment that's settling around 6.5-7%. That's still elevated compared to the pre-2022 world of 3-4%, but it's predictable.
Predictability changes market psychology. When buyers know rates aren't dropping next week, they start making decisions. When rates aren't spiking, refinancers start pulling the trigger.
What I'm Seeing in Appraisals Right Now
In the last 30 days, I've completed 47 appraisals across Orange County. The volume is picking up compared to late 2023.
More importantly, the appraisals themselves feel different. In 2023, homes with inflated pandemic prices were still struggling. Sellers were asking $900,000 for homes that would appraise at $820,000. The gap was painful.
Now, the gap is closing. Sellers have adjusted expectations. Appraisals are coming in closer to asking prices because the asking prices are more realistic.
That's market stabilization at work.
Inventory and Competition
With stable rates comes more inventory. Homeowners who were sitting tight now feel confident enough to list. I'm seeing more homes on the market in Huntington Beach and Long Beach than I did in Q4 2023.
More inventory means less competition for buyers, which means smoother appraisals and fewer low-appraisal surprises.
What About Refinancing?
Refinancing volume is picking up. Homeowners with equity are starting to explore whether refinancing makes sense at a stable 6.5-7% rate. For some, it does. For others, it doesn't.
What matters for appraisals: I'm doing more refinance appraisals now than in late 2023. And those appraisals are more likely to support the loan request because homes aren't declining in value anymore.
The Risk to Stability
Here's the caveat: Stability assumes rates stay in the 6-7% range. If the Fed signals rate cuts coming, we could see a rush of refinancers and new buyers, which would heat the market again. If the opposite happens and rates spike to 8%, it's back to volatility.
But right now, in January 2024, the market is on stable footing. That's better than we could say 60 days ago.
What This Means for Your Plans
If you've been sitting on the fence about selling, a stabilized market gives you better information. Your appraisal will reflect current conditions more clearly because those conditions aren't moving constantly.
If you're thinking about refinancing, the advantage of stable rates is that you can run the numbers confidently. A 6.7% rate today will likely still be 6.7% in 60 days.
If you're buying, stable rates mean less competition and more predictable financing. That's better for appraisals and for your decision-making.
The market is normalizing. After a year of volatility, that's exactly what buyers, sellers, and appraisers needed.