Mortgage rates have dropped for the second week in a row amid concerns about bank failures and financial market uncertainty, with the 30-year fixed-rate mortgage averaging 6.42% in the week ending March 23. The Federal Reserve has raised interest rates by a quarter point, but also signaled that its series of aggressive rate hikes could be coming to an end. While the slight retreat in rates over the past week boosted mortgage applications, home affordability worsened through February, with the national median monthly payment for those applying to purchase a home rising nearly 5% to $2,061 from $1,964 in January.
Mortgage rates have dropped for the second week in a row amid concerns about bank failures and financial market uncertainty, with the 30-year fixed-rate mortgage averaging 6.42% in the week ending March 23. The Federal Reserve has raised interest rates by a quarter point, but also signaled that its series of aggressive rate hikes could be coming to an end. While the slight retreat in rates over the past week boosted mortgage applications, home affordability worsened through February, with the national median monthly payment for those applying to purchase a home rising nearly 5% to $2,061 from $1,964 in January.
According to Freddie Mac's data released on Thursday, mortgage rates have dropped for the second consecutive week amid concerns over bank failures and market uncertainty. The 30-year fixed-rate mortgage averaged 6.42% in the week ending March 23, down from 6.60% the previous week. This is good news for homebuyers as rates are slightly lower, and home prices are stabilizing. Freddie Mac's chief economist, Sam Khater, suggests that if the mortgage rates continue to decline over the next few weeks, buyers can expect a rebound during the first weeks of the spring home buying season. The survey is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country, including only borrowers who have 20% down payment and excellent credit.
Despite the Federal Reserve's efforts to cool the US economy, the rates had been trending down after hitting a 2022 high of 7.08% in November. However, they started climbing again in February, and the Federal Reserve raised interest rates by a quarter point on Wednesday to battle stubbornly high inflation. While the Fed does not directly set the interest rates borrowers pay on mortgages, its actions do influence them. Mortgage rates usually track the yield on 10-year US Treasury bonds, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does, and investors' reactions.
Bob Broeksmit, president and CEO of the Mortgage Bankers Association, said that while rates remain much higher than a year ago, MBA is forecasting a gradual decline, with the 30-year fixed rate falling to around 5.3% by the end of the year. However, home affordability worsened in February, and homebuyer affordability declined, with the national median monthly payment for those applying to purchase a home rising nearly 5% to $2,061 from $1,964 in January. Ongoing affordability challenges weigh on buyers and sellers preparing for the spring housing market, according to Hannah Jones, an economic data analyst at Realtor.com. Elevated rates and high prices mean that the optimal combination of prices and mortgage rates does not exist in the market for many would-be buyers.
Source: https://www.cnn.com/2023/03/23/homes/mortgage-rates-march-23/index.html
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