Mortgage rates declined last week, breaking a three-week streak of increases.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.71%, down from 6.79% the week prior.
A year ago at this time, the 30-year FRM averaged 5.23%.
The 15-year fixed-rate mortgage also fell from 6.18% to 6.07%. A year ago, it averaged 4.38%.
“Mortgage rates decreased after a three-week climb,” said Sam Khater, Freddie Mac’s Chief Economist. “While elevated rates and other affordability challenges remain, inventory continues to be the biggest obstacle for prospective homebuyers.”
Elevated rates are keeping prospective home sellers locked in their current homes, unwilling to give up the super-low rates they scored during the pandemic housing boom. Builders are building, but not fast enough. The U.S. needs more than 300,000 mid-priced homes to meet demand.
Middle-income Americans are struggling to find homes in their price range. Homes priced under $500,000 are “flying off the market,” and multiple offers that bump up the final price are common.
“Middle-income buyers face the largest shortage of homes among all income groups, making it even harder for them to build wealth through homeownership,” said Nadia Evangelou, NAR senior economist and director of real estate research.
Evangelou said that solving the problem will require a two-fold approach targeting both low affordability and the stock shortage.
“It’s not just about increasing supply. We must boost the number of homes at the price range that most people can afford to buy,” she said.
A new survey found that nearly half of Americans under the age of 46 blame the government for inflated housing prices, saying it hasn’t done enough to promote affordability.