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Mortgage rates rose again this week as housing inflation continues to rise, adding further illumination for weary would-be buyers and sellers.
Freddie Mac’s latest primary mortgage market study, released Thursday, found that the average benchmark interest rate 30 year fixed mortgage This week’s rate rose to 6.77% from 6.64% last week. The 30-year average interest rate was 6.32% a year ago.
Homes for Sale in Cupertino, CA on February 7, 2024. Demand for housing is strong despite inventory shortages, and housing prices are rising. (Lauren Elliott/Bloomberg via Getty Images/Getty Images)
Interest rates on 15-year fixed mortgages also rose to an average of 6.12%, following last week’s 5.9%. A year ago, interest rates on 15-year fixed bonds averaged 5.51%..
At the same time, home prices continued to rise, driving out prospective buyers as they became increasingly out of market value.
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Mortgage Bankers Association (MBA) Index Applying for a mortgage loan New data released on Wednesday showed that stocks fell 2.3% in the week ending February 9 compared to the previous week.
Homeowners locked in low interest rates have no desire to sell at interest rates in the mid-6% range, with the majority fixed at less than 5%. (David McNew/Getty Images/Getty Images)
Meanwhile, many homeowners interested in moving are choosing to stay put, citing the financial disincentive of taking advantage of significantly higher mortgage rates than currently available.
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Hannah Jones, senior economic research analyst at Realtor.com, said a March interest rate cut by the Federal Reserve appears unlikely, with mortgage rates remaining in the mid-6% range as they have been in recent weeks. It is expected that this will continue.
Buyer activity tends to pick up in the spring, and absent a significant drop in mortgage rates, increased demand could further exacerbate the affordability crisis.
An “Open House” sign outside a house in Washington, DC, USA on Sunday, November 19, 2023. (Nathan Howard/Bloomberg via Getty Images/Getty Images)
“Many homeowners still feel trapped by rising mortgage rates,” Jones said, adding, “If buyer demand increases faster than seller activity, it could lead to upward pressure on prices. There is a gender,” he said.
However, there are signs that demand for home purchases may remain weak.
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“The economy has been strong so far this year, and interest rates may remain high for an extended period of time, potentially slowing the spring home buying season,” Sam Cater, chief economist at Freddie Mac, said in a statement. Stated. “Our data shows that so far in 2024, mortgage applications for home purchases are down in more than half of all states compared to the same period last year.”
FOX Business’ Megan Henney contributed to this report.
