Mortgage rates fell again this week to their lowest levels since February, according to Freddie Mac. (iStock)
Mortgage rates fell again this week to their lowest since February on expectations that the Federal Reserve will cut rates by 25 basis points in September, according to Freddie Mac.
According to Freddie Mac’s latest report, the average 30-year fixed-rate mortgage for the week ending Aug. 1 was 6.73%. Primary mortgage market research. That’s down from an average of 6.78% last week and lower than 6.90% a year ago.
The average interest rate on a 15-year mortgage is 5.99%, down from 6.07% last week and 6.25% last year.
on wednesday, Fed Chairman Jerome Powell told reporters: The central bank has become more confident that inflation is heading towards its 2% target rate, signaling that while it did not cut interest rates this time, a cut could come soon. Market expectations are for a 25 basis point cut by the central bank’s September meeting. On Wednesday, the Mortgage Bankers Association said it expects inflation to remain moderate and expects two rate cuts this year.
But the Fed’s loose interest rate policy and stable home prices may not be enough to lure some home buyers back into the market who are currently holding off on home affordability issues, according to Freddie Mac chief economist Sam Carter.
“Expectations of Fed rate cuts and signs of subdued inflation bode well for the market, but concerns about consumer confidence could prevent any immediate upside as homebuying difficulties remain a top concern,” Carter said. “Nevertheless, the recent slowdown in home price growth and rising housing inventory are welcome signs for potential homebuyers.”
Homebuyers can find competitive mortgage rates by shopping around for options. Visit an online marketplace like Credible to compare rates from multiple lenders at once.
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Housing prices are sluggish
A new monthly home price survey showed the national median price fell from $445,000 in June to $439,950 in July. Report by Realtor.comAt the same time, housing supply increased by 36.6%, the ninth consecutive month of growth and is now at its highest level since the pandemic.
Those two factors, combined with the prospect of lower interest rates and the possibility of lower mortgage rates, should bring buyers back into the market.But with home prices hovering near record highs, buyers waiting for a further reduction in borrowing rates may not find one, says Jiayi Xu, an economist at Realtor.com. Recent Analysis of Realtor.com He said 86 percent of outstanding mortgage debt has interest rates below 6 percent and more than three-quarters has interest rates below 5 percent, still significantly lower than this year’s interest rates.
“The housing market has cooled in recent weeks with prices stabilizing, listings increasing and people staying on the market longer,” Xu said. “However, affordability remains the biggest challenge as home prices remain at or near record highs. The interest rate cut scheduled for September will be a good start to lowering interest rates, but the subsequent decline in mortgage rates may not be as large as many expected as the market has already priced in a rate cut and that expectation is reflected in the recent rate cuts.”
If you want to see if you qualify for a mortgage based on your current credit score and salary, consider visiting Credible, which allows you to compare multiple mortgage lenders at once.
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Recent Zillow report Home sellers said they had been forced to lower asking prices to attract buyers.
About 24.5% of homes listed in June were reduced in price, up from 23.8% the previous month. Zillow said market dynamics are returning to pre-pandemic normal in terms of competition and negotiating power among buyers.
“We’re seeing more homes being left on the market because they’re not competitively priced or poorly marketed,” said Skylar Olsen, chief economist at Zillow. “Sellers are more likely to lower prices to attract buyers struggling with high home prices.”
“For many years, the housing market has been characterized by fast sales and limited options,” Olsen continued. “We are now approaching pre-pandemic conditions in terms of competition, if not costs. Slowing price appreciation and, in some areas, falling prices amid lingering easy mortgage rates, will encourage buyers to postpone saving for a down payment.”
If you’re ready to search for the best rate on your new mortgage, consider visiting an online marketplace like Credible to compare rates from multiple lenders at once.
High homeowners insurance rates are scaring Florida home buyers away. Other states face the same problem.
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