Interest rates on 30-year mortgages have fallen to 6.6%, according to Freddie Mac. (iStock)
Mortgage rates continued their downward trend this week, dropping to levels not seen since last spring, according to Freddie Mac.
The average interest rate on a 30-year fixed-rate mortgage was 6.6% for the week ending Jan. 18, according to Freddie Mac's latest research. Primary mortgage market research. This was a slight decrease from the previous week's average of 6.66%. At this time a year ago, the average interest rate on a 30-year fixed-rate mortgage was 6.15%.
“Mortgage rates fell this week, hitting their lowest level since May 2023,” said Sam Cater, chief economist at Freddie Mac. “This is an encouraging development for the housing market, particularly for first-time home buyers who are sensitive to changes in home affordability. However, as purchase demand continues to cool, the already depleted inventory for sale will be under further pressure. It will be.”
While lower interest rates bode well for buyers, there's still a chance they won't stabilize as the economy teeters on the path to recovery. This can pose a problem for buyers trying to figure out exactly how much to budget for a home purchase.
“Recent changes in mortgage rates have posed a major challenge for homebuyers trying to budget for their purchase,” Realtor.com economist Jiayi Xu said in a release. “This challenge is particularly acute for first-time homebuyers, who typically have low down payment percentages, and a small increase in mortgage rates could push them further away from realizing their dreams of homeownership.”
If you think you're ready to consider a mortgage, consider using Credible, which makes it easy to compare interest rates from multiple lenders in minutes.
Homebuyers will struggle in 2023, but homeownership may rise in 2024
Interest rates expected to fall below 6% by year-end
Despite the ups and downs in the mortgage industry, experts still predict positive results in 2024. Fannie Mae Economic and Housing Outlook We predict that 30-year mortgage rates will finally fall below 6% by the end of the year.
“After the extreme volatility in interest rates over the past several years, we expect 30-year fixed-rate mortgage rates to continue to moderate through 2024, heading toward levels below 6% by year-end,” Fannie Mae said. Stated.
Historically, this is a healthy decline. After all, his 1971 purchaser was the first time data on mortgage rates began to be collected. The rate was over 7%. The situation was even worse in the 1980s, when the rate reached more than 18% of him.
As interest rates decline, housing affordability has gradually increased, but many people still cannot afford to buy a home, primarily due to lack of income, higher homeowners insurance premiums, and costs associated with inflation. There are many households.
According to Redfin, the average U.S. mortgage payment in December 2023 was $2,361. report. That's $327 less than in October, when payments reached a record high.
During 2023 only 15.5% of homes on the market It was affordable to the average American family. This is a significant decrease from 20.7% of affordable housing in 2022.
If you're looking to buy a home this year, sites like Credible allow you to view multiple mortgage lenders and get personalized rates in just minutes.
Newly built homes are popular among millennials despite high housing costs
Housing prices are expected to fall slightly
Although housing is still not affordable for most buyers, home prices are set to fall in 2024, indicating the potential for a more affordable market in the future.
red fin predicts prices will fall 1% year over year in the second and third quarters of the year, when the market recovers in the spring. This is the first price decline since 2012, following the Great Recession.
As prices fall, listings may increase slightly, giving buyers relief from the gridlock market in 2023. With interest rates of 3% to 4% not expected any time soon, Redfin predicts some homeowners will relent and decide to sell.
Redfin agents say the most listings will be in expensive areas like South Florida. This is mainly because residents put their homes up for sale when they move to cheaper areas.
If you're looking to take advantage of the market's slow recovery, visit Credible to compare interest rates and lenders in minutes.
The most affordable cities to buy a home in 2024 are: REALTOR.COM
Have a finance-related question but don't know who to ask? Email it to your trusted money expert. Moneyexpert@credible.com Your questions may be answered in Credible's Money Expert column.
