Predictions of an impending recession brought on by rising interest rates have been made all year long. Apart from the downturn in the real estate industry, the economy has not been exhibiting signs of a recession. Real estate typically comes first, then the economy. A recession is therefore less likely to occur if the real estate market recovers this spring. On the other hand, a recession becomes much more likely if rates remain stubbornly high and real estate sales continue to lag.
During the holiday week, rates started to decline. 30-year rates increased to 6.42% from 6.27% for the week ending December 29. Additionally, the 15-year loan rate marginally dropped to 5.68%. 30-year fixed rates were on average 3.11% a year ago, which is over 3.25% lower than they are now.