Mortgage interest rates have dropped to 6.79% for 30-year mortgages. (iStock)
Mortgage interest rates continued to decline slightly this week. Freddie Mac reported. The average interest rate on a 30-year fixed-rate mortgage was 6.79%, down from last week’s average of 6.87%.
At this time last year, mortgage rates for 30-year mortgages averaged 6.35%, near the lower end of the 6% range.
“Mortgage rates have fallen slightly this week, giving some prospective homebuyers some space in their budgets,” said Sam Cater, chief economist at Freddie Mac.
“We are also seeing encouraging data on existing home sales, which reflects an improvement in inventory.Nonetheless, as the market looks for further interest rate cuts and watches for signs of subduing inflation, Interest rates are still rising by nearly 7%.
Interest rates on 15-year mortgages have also fallen since last week, with the average rate on fixed-rate mortgages now at 6.11%. This is higher than last year’s average of 5.56%.
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Mortgage applications were suspended this week.
Although interest rates have fallen, buyers are not yet fully buying. According to the Mortgage Bankers Association (MBA), the number of mortgage applications decreased by 0.7% from the previous week. weekly survey.
Compared to a year ago, MBA’s unadjusted purchase index is down 16%, indicating it is struggling to keep buyers in the market.
“Mortgage application activity slowed last week despite a slight decline in mortgage rates,” said Joel Kang, MBA Vice President and Deputy Chief Economist. “It wasn’t enough to stimulate it.”
“Purchase applications were essentially unchanged as homebuyers continued to look forward to lower mortgage rates and more properties coming onto the market.”
It was predicted earlier this year that interest rates would eventually fall below 6%, but that seems unlikely at this point.
“Lowering interest rates should help free up additional inventory as the lock-in effect is reduced, but we expect that to happen only gradually…Similarly, as interest rates remain high , there is little incentive to refinance interest rates/terms at this time,” Ms Kang said.
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It’s cheaper to rent than buy in all 50 major U.S. metropolitan areas
It’s now officially cheaper to rent than to buy in many of the country’s major metropolitan areas.a recent reports Realtor.com research reveals that starter homes are more affordable than buying in the 50 largest metropolitan areas.
As of February 2024, the average monthly cost to purchase a starter home was $1,027, 60.1% more expensive than the average rental cost.
Although the rental market looks strong, the median rent in the U.S. has decreased year-over-year, according to Realtor.com. For one- to two-bedroom units, rents in the top 50 metropolitan areas fell by 0.4%. Rent prices have declined for seven consecutive months.
One of the top markets for more affordable rentals is in Austin, Texas. Buying a home in Austin costs an average of $3,695 per month, which is 141.5% more than the average monthly rent. Rental prices in Austin average $1,530 per month.
Seattle is also an area where buying is more expensive than renting. The average cost of purchasing is he $4,422, but the average renter pays he $2,000 a month.
If you think you’re ready to consider a mortgage, consider using Credible to easily compare interest rates from multiple lenders and get a pre-approval letter in minutes.
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