Mortgage Economic Review December 2023

The Mortgage Economic Review is a Monthly Summary of Key Economic Indicators, Data, and Events Pertinent to Mortgage, Housing, and Finance Professionals.


AT A GLANCE – Key Economic Events and Data released during November 2023

  • Interest Rates: The 10-year Treasury yield fell to 4.37% (Nov 30) from 4.88% (Oct 31).
  • Housing: October Existing Home Sales fell 4.1% (-14.6% YoY), New Home Sales fell 5.6% (+17.7% YoY), and Pending Home Sales fell 1.5% (-8.5% YoY). Home Prices are up 4.0% – 5.5% YoY.
  • Labor: The US Economy created 150,000 New Jobs in October. The Unemployment Rate inched higher to 3.9%. Wage Growth slowed slightly to a 4.1% YoY pace.
  • Inflation: October CPI was flat (+3.2% YoY), and PCE was also unchanged (+3.0% YoY).
  • The Economy: US GDP grew by a 5.2% annualized rate in 3Q2023, up 3.0% YoY.
  • Consumers: October Retail Sales fell 0.1% (+2.5% YoY), Consumer Confidence rose, Consumer Sentiment fell.
  • Stock Markets rose in November: Dow +8.8%, S&P +8.9%, Nasdaq +10.7.
  • Oil Prices fell to $76/Barrel (Nov 30) from $82/Barrel (Oct 31).


Interest Rates and Fed Watch

The Bond and Stock Markets had a great month as Interest Rates declined significantly during November. Many Market Analysts are theorizing that the Fed has finished raising Interest Rates. That theory is based on recent favorable Inflation, Labor, GDP, and Consumer data. Inflation is declining. The Labor Market, while still tight, is softening. The Consumer continues to spend but is struggling with higher prices and moderating Wage Growth. The Economy is humming along. With a GDP of 3.0% YoY, there is no Recession in sight, but it is expected to slow down. The “Soft Landing” the Fed was trying to engineer may come to fruition in 2024. The next FOMC Meeting is December 12th and 13th. At this point, Fed Watchers don’t expect an Interest Rate Increase at that meeting.

  • 10-Year Treasury Note Yield fell to 4.37% (Nov 30) from 4.88% (Oct 31).
  • 30-Year Treasury Bond Yield fell to 4.54% (Nov 30) from 5.04% (Oct 31).
  • 30-Year Fixed Mortgage fell to 7.22% (Nov 30) from 7.79% (Oct 26).
  • 15-Year Fixed Mortgage fell to 6.56% (Nov 30) from 7.03% (Oct 26).


Housing Market Data Released during November 2023

Despite lower Existing Home Sales, Prices continued to increase in 2023. In the last 12 months, Existing Home Prices have increased 4.0% to 5.5% depending on which Home Price Index you follow and the geographic location. On the bright side, New Home Sales are brisk while their prices have softened. Fortunately, lower Mortgage Rates will help Affordability and Inventory. If Mortgage Rates continue to drift lower, “Locked-In” Homeowners will be more inclined to list their Homes for sale as they can now afford to buy another home and move.

  • Existing Home Sales (closed deals in October) fell 4.1% to an annual rate of 3,790,000 homes, down 14.6% in the last 12 months. The median Single-Family Home price is $396,100, up 3.0% YoY. The Median Condo price is $356,000, up 7.6% YoY. Homes were on the market for an average of 23 days, and 66% sold in less than a month. Currently, 1,150,000 homes are for sale, down 5.7% YoY.
  • New Home Sales (signed contracts in October) fell 5.6% to a seasonally adjusted annual rate of 679,000 homes, up 17.7% YoY. The median New Home price is $409,300 (down from a peak of $496,800 in Oct 2022). The average price is $487,000 (down from a peak of $568,700 in Dec 2022). There are 439,000 New Homes for sale, a 7.8-month supply.
  • Pending Home Sales Index (signed contracts in October) fell 1.5% to 71.4 from 72.6 the previous month, down 8.5% YoY.
  • Building Permits (issued in October) rose 1.1% to a seasonally adjusted annual rate of 1,487,000 units – down 4.4% YoY. Single-Family Permits rose 0.5% to an annual pace of 968,000 homes, up 13.9% YoY.
  • Housing Starts (excavation began in October) rose 1.9% to an annual adjusted rate of 1,372,000, down 4.2% YoY. Single-Family Starts rose 0.2% to 970,000 units, up 13.1% YoY.
  • Housing Completions (completed in October ) fell 4.6% to an annual adjusted rate of 1,410,000 units – up 4.6% YoY. Single-Family Completions fell 0.9% to an annual adjusted rate of 993,000 homes – up 2.0% YoY.
  • S&P/Case-Shiller 20 City Home Price Index rose 0.7% in September, up 3.9% YoY.
  • FHFA Home Price Index rose 0.6% in September, up 5.5% YoY.


Labor Market Economic Data Released during November 2023

The Economy created 150,000 New Jobs during October. The Labor Market continues to show amazing resilience but has started soften. Wage Growth has slowed, and the Unemployment Rate is creeping higher, but there are still 9,553,000 Job Openings. Labor Demand typically stays high in  December because of the need for Temporary Holiday Seasonal Workers. Expect the Labor Market to moderate in January and February. The November Jobs Report will be released on Friday, December 8th. 

  • The Economy created 150,000 New Jobs During October and 297,000 during September.
  • The Unemployment Rate rose to 3.9% during October from 3.8% in September.
  • The Labor Force Participation Rate fell to 62.7% during October from 62.8% in September.
  • The Average Hourly Wage rose 0.2% during October and 0.2% in September, up 4.1% YoY.
  • Job Openings rose to 9,553,000 in September from 9,497,000 in August and 8,827,000 in July.


Inflation Economic Data Released during November 2023

Inflation is decelerating. The latest data shows prices were unchanged, with the CPI and PCE at 0.0%. Over the past year, the CPI is 3.2%, and the PCE is 3.0% – closing in on the Fed target of 2.0%. The major drivers of Inflation have been Food, Shelter, Energy, and Services (Wages). As Interest Rates come down, Shelter Costs will decline. As the Labor Market softens, Wage growth will slow. As Energy Prices moderate, Food Prices will drop. This latest data is very encouraging, but the War on Inflation has a long way to go before victory can be celebrated.

  • CPI unchanged 0.0%, up 3.2% YoY               |    Core CPI rose 0.2%, up 4.0% YoY
  • PPI fell 0.5%, up 1.3% YoY                            |    Core PPI unchanged 0.0%, up 2.4% YoY
  • PCE unchanged 0.0%, up 3.0% YoY              |    Core PCE rose 0.2%, up 3.5% YoY


GDP Economic Data Released during November 2023

The 2nd Estimate for 3rd Quarter 2023 GDP showed the US Economy grew at a 5.2% annualized rate, up 3.0% YoY. So where’s the Recession everyone was talking about 10 months ago? Now, most Economists don’t expect a Recession, but they expect the GDP to retreat from this lofty 5.2% level. If a Recession occurs next year, it will be a mild one – the “Soft Landing” the Fed aimed for.


Consumer Economic Data Released during November 2023

Retail Sales fell 0.1% in October from a gain of 0.9% in September. Why the sudden drop? Were Consumers cutting back or waiting for Black Friday Sales? Early estimates for Black Friday Sales are $16.4 Billion, up 7.6% from last year. $9.8B of the $16B was from Online Sales. Along with robust online sales, retailers reported increased foot traffic in their stores. Despite the healthy Sales Data, Retail Analysts are concerned. Credit Card balances topped $1.0 Trillion a few months ago and continue to grow. Higher debt loads, combined with dwindling savings and lower wage growth, may be an early sign the Consumer is getting tapped out.

  • Retail Sales fell 0.1% during October, up 2.5% in the last 12 months.
  • Consumer Confidence Index rose 3.5% to 102.6 from a revised 99.1 the prior month, up 0.6% YoY.
  • Consumer Sentiment Index (U of M) fell 3.9% to 61.3 from 63.8 the previous month.


Energy, International, and Things You May Have Missed

  • West Texas Intermediate Crude fell to $76/Barrel (Nov 30) from $82/Barrel (Oct 31)
  • North Sea Brent Crude fell to $83/Barrel (Nov 30) from $86/Barrel (Oct 31)
  • Natural Gas fell to $2.80/MMBtu (Nov 30) from $3.54/MMBtu (Oct 31)
  • FHFA raised the Conforming Loan Limit for 2024 to $766,550  ($1,149,825 High Cost)
  • FHA raised the Loan Limit for 2024 to $498,257  ($1,149,825 High Cost )



The Mortgage Economic Review is a concise summary of Key Economic Data that influences the Mortgage and Housing Markets. It’s a quick read that keeps busy Professionals updated on important Economic Information. Feel free to share this with colleagues in the Mortgage, Housing, Finance, and Banking business. To have the Mortgage Economic Review emailed to you each month, click here.


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Mark Paoletti,


The Mortgage Economic Review is for informational and educational purposes only and should not be construed as investment, legal, financial, or mortgage advice. The information is gathered from sources believed to be credible and may be opinion-based and editorial in nature. Mortgage Elements Inc does not guarantee or warrant its accuracy or completeness, and there is no guarantee it is without errors. This newsletter is for use by Mortgage, Housing, and Finance Professionals and is not an advertisement to extend credit or solicit mortgage originations. © Copyright 2023 Mark Paoletti, Mortgage Elements Inc, All Rights Reserved.