The 30-year FRM increased once again last week, blocking even more homebuyers from entering the market.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.43%, up from 6.39% the week prior.
A year ago at this time, the 30-year FRM averaged 5.11%.
The 15-year fixed-rate mortgage fell, however, down to 5.71% from 5.76%. A year ago, it averaged 4.40%.
“The 30-year fixed-rate mortgage increased modestly for the second straight week, but with the rate of inflation decelerating rates should gently decline over the course of 2023,” said Sam Khater, Freddie Mac’s Chief Economist.
“Incoming data suggest the housing market has stabilized from a sales and house price perspective. The prospect of lower mortgage rates for the remainder of the year should be welcome news to borrowers who are looking to purchase a home.”
Rates should begin slowly moderating after the FOMC’s next meeting, scheduled for May 2-3.
Experts expect to see one more quarter-point rate hike from the Central Bank before a pause in increases.
“There have been signals that mortgage interest rates may be at or near their peak, given recent encouraging news around inflation and a corresponding drop in the U.S. Treasury yields that help set mortgage rates. A sustained drop could push mortgage rates into the 5% range late in the second quarter or in the second half of 2023,” Neda Navab, Compass U.S. region president, told Forbes.
She noted that other factors could influence that projection, however, saying declines are “definitely not guaranteed.”
Though inflation has cooled somewhat, recent data indicates it is still brisk. The Fed’s preferred inflation measure, the personal consumption expenditures price index excluding food and energy, rose 0.3% in March and 4.6% YOY.
“It’s improving and the economy is cooling, but it’s still far from tepid,” Diane Swonk, chief economist at KPMG, told CNBC.
Housing continues to be a major driver of inflation. While other categories have seen major dips, shelter costs are up 8.2% in the last year, accounting for over 60% of the total increase in consumer prices excluding energy and food.
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