Rates Slip Further, Reach 6.89%

Mortgage rates slipped further last week, but homebuyers have yet to rush back to the market thanks to house prices and tough winter weather.

Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.89%, down from the week prior’s 6.95%.

A year ago at this time, the 30-year fixed-rate mortgage averaged 6.64%.

Fifteen-year rates also decreased to 6.05% from 6.12%. A year ago at this time, they were at 5.90%.

“The 30-year fixed-rate mortgage decreased this week, now averaging 6.89%,” said Sam Khater, Freddie Mac’s Chief Economist. 

“Mortgage rates have been stable over the last month and incoming data suggest the economy remains on firm footing. Even though rates are higher compared to last year, the last two weeks of purchase applications are modestly above what we saw a year ago, indicating some latent demand in the market.”

Samir Dedhia, CEO of One Real Mortgage, noted that though economic data has helped move rates down, homebuyer demand remained constrained, down 4% on the week.

“One of the key factors behind this dip is an unseasonably harsh winter, which has temporarily slowed homebuying activity. As we move into early spring, with improved weather and potentially lower rates, demand should rebound,” Dedhia added.

Home prices remain high despite beginning to moderate in some parts of the country, keeping many potential buyers on the sidelines as well.