Homebuyers lucked out again this week as rates continued sliding, falling by nearly twenty basis points.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage rate averaged 6.42%, down from 6.60% the week prior.
A year ago at this time, the 30-year FRM averaged 4.42%.
The 15-year fixed-rate mortgage dipped from 5.90% to 5.68%. A year ago, it averaged 3.63%.
“Mortgage rates continued to slide down as financial market concerns came to the fore over the last two weeks,” said Sam Khater, Freddie Mac’s Chief Economist.
“However, on the homebuyer front, the news is more positive with improved purchase demand and stabilizing home prices. If mortgage rates continue to slide over the next few weeks, look for a continued rebound during the first weeks of the spring homebuying season.”
Some buyers returned to the market early in order to snag a sub-7% interest rate and falling home prices. Existing home sales exploded in February while new home sales increased, though less than expected.
Inventory remains low, with homeowners unwilling to move and give up low rates they locked in last year on their current home.
The Federal Reserve’s quarter-point rate hike this week may also impact demand moving forward.
Continuing rate increases “will likely limit any dramatic, near-term downward movement of mortgage rates even as Treasuries decline,” Zillow Senior Economist Orphe Divounguy wrote.
“For borrowers, lending standards were already quite strict, and tighter conditions may make it more difficult for some home shoppers to secure funding. In turn, for home sellers, the time it takes to sell could increase,” Divounguy said.
He noted that slower economic growth and inflation should lead to rates falling in the future, however, easing affordability pressures down the road.
“That could help free up a tight market, though would coincide along with a period of increased risk of job losses.”
Analysts at Realtor say the best time to list a home this spring is April 16 to 22.
According to Hannah Jones, at a national level, this week represents a balanced selection of market conditions that favor sellers.
“While it does not have the highest price or the lowest time on market, this week offers higher than average prices and lower than average time on markets while also offering a higher than average number of buyers – measured as viewers per listing,” Jones wrote.
Jones wrote that homes listed during this week have historically reached prices 2.1% higher than the average week throughout the year, and are typically 12.1% higher than the start of the year.
While buyers outnumbered sellers in recent years, Jones said they expect to see more balance between buyers and sellers in 2023.
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The result of this week’s two-day Federal Open Market Committee meeting was not nothing, but neither was it as aggressive a decision as officials at the Federal Reserve might have liked to make. https://t.co/EbLPB0Pgy0
— The Mortgage Note (@TheMortgageNote) March 23, 2023
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