Mortgage rates fell last week on the heels of the FOMC’s May meeting.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.39%, down from 6.43% the week prior.
A year ago at this time, the 30-year FRM averaged 5.27%.
The 15-year fixed-rate mortgage increased as well, to 5.76% from 5.71%. A year ago, it averaged 4.52%.
“This week, mortgage rates inched down slightly amid recent volatility in the banking sector and commentary from the Federal Reserve on its policy outlook,” said Sam Khater, Freddie Mac’s Chief Economist.
“Spring is typically the busiest season for the residential housing market and, despite rates hovering in the mid-six percent range, this year is no different. Interested homebuyers are acclimating to the current rate environment, but the lack of inventory remains a primary obstacle to affordability,” Khater added.
Federal Reserve Chair Jerome Powell announced another quarter-point hike on Wednesday. The benchmark rate now stands between 5% and 5.25%, the highest level in 16 years.
He hinted that a pause may be in order by the June meeting based on cooling inflation data, though it is far from assured. Powell said the bank is “prepared to do more” if conditions worsen.
Still, the news was enough to assure analysts that another major rate jump is unlikely.
“Unexpectedly bad inflation data, more banking turmoil, or failure to raise the U.S. debt ceiling could throw a wrench in the Fed’s plans, but homebuyers and sellers can feel a little more confident that mortgage rates won’t skyrocket again,” Redfin Economics Research Lead Chen Zhao said.