Mortgage rates are falling, but borrowers are hesitant in hopes that rates will fall further. (iStock)
Mortgage rates fell further this week on reassurance that strong economic data and favorable inflation reports may finally lead the Federal Reserve to cut rates.
According to Freddie Mac’s latest report, the average 30-year fixed-rate mortgage for the week ending July 18 was 6.77%. Primary mortgage market research. That’s down from an average of 6.89% last week and roughly in line with 6.78% a year ago.
The average interest rate on a 15-year mortgage is 6.05%, down from 6.17% last week and 6.06% last year.
Mortgage rates continue to fall and the Fed, which has kept its benchmark interest rate in the 5.25% to 5.50% range for the past year, is showing signs of lowering borrowing costs soon. At the Washington DC Economic Club Earlier this week, Fed Chairman Jerome Powell said the central bank won’t wait until inflation hits its 2% target before cutting interest rates, citing the longer-term implications of the policy. Rather, the central bank wants more confidence that inflation will return to its target before it starts cutting interest rates.
“Fortunately, the more modest June employment report and a decline in the CPI are solid numbers that should help give the Fed more confidence that the economy is moving in the right direction and raise expectations that the July FOMC statement will signal a rate cut,” Jiayi Xu, economist at Realtor.com, said in a statement.
But the pace of home buying has been slow, even as mortgage rates have fallen to their lowest levels since mid-March, according to Sam Carter, chief economist at Freddie Mac.
“Mortgage rates are heading in the right direction and the economy remains resilient, two positive signs for the housing market,” Carter said. “But homebuyers have not yet responded to the lower interest rates, and purchase application demand remains about 5% lower than in the spring, when rates were roughly the same. This is not unusual; lower interest rates can sometimes dampen demand, but this apparent contradiction is because buyers are waiting for rates to fall further before they can make a purchase decision.”
If you are considering buying a home, it is a good idea to compare different lenders to find the best mortgage interest rate. Visit Credible to compare different lender options and choose the one with the best interest rate.
Middle-income Americans more optimistic about finances and direction of economy: survey
Refinancing activity picks up
Falling mortgage interest rates have led to an increase in mortgage refinancing applications, Mortgage Bankers AssociationMortgage applications increased 3.9% for the week ending July 12, 2024, driven by a 15% increase in refinances to the highest level since August 2022. Demand for refinances was up 37% compared to the same week a year ago, when mortgage rates were the same.
“Signs of subsiding inflation and the increasing likelihood that the Federal Reserve will cut interest rates this fall should lead to lower mortgage rates, which will be good news for prospective homebuyers who may be unwilling or unable to jump into the housing market at current prices,” said MBA CEO Bob Broeksmit.
Meanwhile, the housing supply continues to grow: The number of homes for sale rose 36.7% in June, the eighth consecutive month of increases, according to real estate firm Realtor.com, while prices continue to rise. report.
“Increasing affordable inventory offers hope to first-time homebuyers who do not have sufficient home equity,” Xu said. “That said, homes of similar size are still more expensive than a year ago, with the asking price per square foot in June up 3.4% compared to last year. Looking ahead, we expect increasing inventory to gradually put downward pressure on price growth, while lower mortgage rates will help lower borrowing costs, providing further relief to potential homebuyers.”
If you want to see if you qualify for a mortgage based on your current credit score and salary, head over to Credible, where you can compare multiple mortgage lenders. immediately.
76% of buy now, pay later users say it has helped them improve their financial situation, but they need to be aware of risks: Survey
Rising home prices are a top concern for Americans
Rising home prices are the top concern for young Americans heading to the polls for the Nov. 5 presidential election, according to a recent Redfin survey. investigation.
According to the survey, about 91% of Gen Zers cited home affordability as an important factor in their vote, ahead of other issues like the economy, abortion and gun rights, preserving democracy, and foreign wars. Millennials, Gen Xers, and Baby Boomers all ranked the economy as the most important factor in choosing a president. Gen Xers and Baby Boomers also placed preserving democracy above home affordability.
“Home affordability is a linchpin in this year’s presidential election because, even though the economy is doing pretty well, unemployment is low and wages are rising, buying a home seems impossible for many Americans,” said Elijah de la Campa, senior economist at Redfin. “This is especially true for young people, who are seeing the cost of buying a first home rise twice as fast as their incomes.”
“While young people are interested in other political issues such as immigration and abortion rights, they are more likely to cite housing affordability as a voting factor because it directly affects their housing, their lifestyle and their ability to build wealth,” de la Campa continued.
If you’re ready to start searching for the best interest rate on your new mortgage, Visit an online marketplace like Credible to compare prices You can work with multiple lenders at once.
High homeowners insurance rates are scaring Florida home buyers away. Other states face the same problem.
Do you have a finance-related question but don’t know who to ask? Email a trusted money expert email address: Your question might be answered in Credible’s Money Expert column.
