Mortgage interest rates are expected to remain below 7%. (iStock)
Freddie Mac says mortgage rates have risen slightly and rates have remained stable in the mid-6% range, but are still attracting interest from homebuyers.
The average interest rate on a 30-year fixed-rate mortgage for the week ending Jan. 11 was 6.66%, according to Freddie Mac's latest research. Primary mortgage market research. This was a slight increase from the previous week's average of 6.62%. A year ago, the average interest rate on a 30-year fixed-rate mortgage was 6.33%.
The average interest rate on a 15-year mortgage was 5.87%, down from 5.89% last week and up from 5.52% last year.
Mortgage rates have risen, but the general expectation is that they will stay below 7% this year. On the other hand, housing prices show no signs of slowing down. According to the latest data, national house prices are currently increasing by 4.8% year-on-year, with the composite index for 10 cities and 20 cities increasing by 5.7% and 4.9%, respectively. S&P CoreLogic Case Shiller Index report.
“Mortgage rates haven't moved much over the past three weeks, staying in the mid-6% range, which is driving demand from homebuyers a little higher,” said Sam Cater, chief economist at Freddie Mac. “Even this modest increase in demand, combined with still-tight inventories, continues to drive prices up faster than incomes, and affordability remains a major headwind for buyers.
“Prospective homebuyers should carefully consider existing state and local resources, including down payment assistance programs that can significantly cover closing costs.”
Homebuyers can find the best mortgage rates by researching and comparing options. Visit online marketplaces like Credible to compare interest rates, choose loan terms, and get pre-approved from multiple lenders at once.
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Mortgage interest rates will decline gradually
Market expectations were that the Fed would begin lowering interest rates as early as its March meeting. Still, the consumer price index in December showed inflation rose more than expected, making that outlook even more remote, according to Realtor.com.
At its December meeting, the central bank Announcement of third interest rate suspensionAs a result, the federal funds rate was left unchanged at 5.25% to 5.5%, the highest level in 22 years. But Fed officials have signaled they may start cutting rates later this year, with interest rates expected to fall to 4.6%. Latest economic forecasts This was revealed in the central bank's Summary of Economic Projections (SEP).
Realtor.com economist Jiayi Xu said any delay in the timeline for mortgage rate easing would affect the speed at which housing stock increases in supply.
“Given that the pace of decline in mortgage rates is likely to be slower than at the end of 2023, growth in listing activity may be slower than expected,” Xu said in a statement. “Based on that, Currently, two-thirds of mortgage balances have interest rates below 4%A large proportion of individuals may choose to postpone their plans to sell, waiting for the possibility of even lower interest rates to purchase their next residence. ”
If you want to refinance your mortgage to take advantage of current mortgage rates, or are ready to choose the best rate on your new mortgage, visit an online marketplace like Credible to compare rates and Consider getting pre-approved from multiple lenders.
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Easy access to down payment help
Freddie Mac is leading the effort to: Streamline documentation You can access the Down Payment Assistance (DPA) program and connect more lenders and homebuyers with this assistance. Historically, various DPA programs have had different administrative procedures, which can have led to confusion and misunderstandings about terms and payment arrangements.
“Saving for a down payment continues to be the biggest barrier to homeownership for low-income and first-time homebuyers,” said Danny Gardner, Freddie Mac's senior vice president of single-family mission and community engagement. ” he said. “We know that standardization has increased efficiency, reduced costs, and improved many areas of the mortgage industry.”
“By adopting standardization and creating an industry-wide set of documents, we will provide clarity and consistency that will enable more lenders to make down payment assistance programs available to more individuals and families across the country. ” Gardener continued.
Even if you're looking to become a homeowner, shopping around can help you find the best mortgage rates. Visit Credible to compare options without affecting your credit score.
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