Rates Jump After Dour Inflation Data

Tough inflation data led to mortgage rates increasing for a second straight week. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.77%, up from the week prior’s 6.64%. A year ago at this time, the 30-year FRM averaged 6.32%. The 15-year fixed jumped to 6.12% from 5.90%. A year ago, it averaged 5.51%. “On the heels of consumer prices rising more than expected, mortgage rates increased this week,” said Sam Khater, Freddie Mac’s Chief Economist.  “The economy has been performing well so far this year and rates may stay higher for longer, potentially slowing the spring homebuying season. According to our data, mortgage applications to buy a home so far in 2024 are down in more…

Applications Reverse, Refis Fall

Mortgage applications are swinging up and down, falling last week as rates posted increases. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – decreased by 2.3%, countering the week prior’s 3.7% rise. Adjusted purchase applications slipped by 3%, while the unadjusted index increased by 4% and was 12% lower YOY. Rates rose to 6.87%, their highest point since December, but have stayed in the mid-6% range since the beginning of 2024. “Purchase applications remained subdued as elevated rates continue to add to affordability challenges along with still-low existing housing inventory. Refinance applications declined and remained depressed, with rates still higher than a year ago,”  said Joel Kan, MBA’s…

Rates Hold Steady at 6.64%

Rates stayed basically the same last week, inching up just slightly. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.64%, barely budging from the week prior’s 6.63%. A year ago at this time, the 30-year FRM averaged 6.12%. Rates have stuck around the mid-6’s  for about two months now. The 15-year fixed decreased to 5.90% from 5.94%. A year ago, it averaged 5.25%. “The economy and labor market remain strong with wage growth outpacing inflation, which is keeping consumer spending robust,” said Sam Khater, Freddie Mac’s Chief Economist. “Meanwhile, affordability in the housing market is an ongoing issue due to continued high home prices, elevated mortgage rates and low supply of homes on the market, particularly…

Mortgage Rates Decline, Reversing One-Week Uptick

Mortgage rates reversed a one-time uptick and fell last week, giving potential buyers even more breathing room. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.63%, down from the week prior’s 6.69%. A year ago at this time, the 30-year FRM averaged 6.09%. Rates have now been largely stable, within the mid-6’s, for almost two months. The 15-year fixed also decreased to 5.94% from 5.96%. A year ago, it averaged 5.14%. “Although affordability continues to impact homeownership, the combination of a solid economy, strong demographics, and lower mortgage rates are setting the stage for a more robust housing market,” said Sam Khater, Freddie Mac’s Chief Economist. Khater noted that expected disinflation should push rates down further…

Powell Responds To Legislative Pressure As Feds Hold Rates Steady

By PATRICK LAVERY Saying the economy has surprised even the experts since the start of the COVID-19 pandemic nearly four years ago, Federal Reserve Board Chairman Jerome Powell on Wednesday announced that the Fed would hold its ground for now and keep its policy interest rate unchanged at its current range of 5.25% to 5.5%. “We believe that our policy rate is likely at its peak for this tightening cycle and that, if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said in prepared remarks following the first two-day Federal Open Market Committee meeting of 2024. The decision by the FOMC was not unexpected, and…

Predictions: Rate Cuts Unlikely This Week

By PATRICK LAVERY Seven weeks ago, the 2023 slate of policy meetings for the Federal Open Market Committee concluded with members voting to leave the key interest rate unchanged for a third straight time. However, anyone hoping that 2024 will begin with some movement in a downward direction is likely to be disappointed this week. Despite a seemingly positive economic outlook that has the stock market soaring to record highs, the experts seem to agree that there will be no change made when Federal Reserve Board Chairman Jerome Powell emerges from the FOMC meeting on Wednesday. The stability, so to speak, of the Fed’s policy interest rate has been mirrored somewhat in the housing market recently. According to Freddie Mac,…

Buying Power Up $40K As Rates Moderate

Homebuyers, newly infused with extra spending power, are returning to the housing market as they come to terms with 6% rates and move to beat out increasing competition. Redfin reported that buyers on a $3,000 monthly budget have gained almost $40,000 in purchasing power as rates have fallen from a peak in October 2023. This theoretical buyer can afford a $453,000 home with a mortgage rate at roughly 6.7%. Just a few months ago, they could only snag a $416,000 home at a 7.8% interest rate, a $37,000 difference. Costs are easing for buyers across the income spectrum, of course. The monthly mortgage payment on the typical U.S. home (about $363,000) is $2,545 with a 6.7% rate but clocked in…

Rates Fall To 6.60%

Mortgage rates have slipped to their lowest levels since May. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.60%, down from the week prior’s 6.66%. A year ago at this time, the 30-year FRM averaged 6.15%. The 15-year fixed fell to 5.76% from 5.87%. A year ago, it averaged 5.28%. “This is an encouraging development for the housing market and in particular for first-time homebuyers who are sensitive to changes in housing affordability,” said Sam Khater, Freddie Mac’s Chief Economist. “However, as purchase demand continues to thaw, it will put more pressure on already depleted inventory for sale.” Rates are the primary concern of most potential buyers, but the market remains crippled by ongoing stock shortages…

Rates Rise For Second Week, But Not By Much

Mortgage rates increased slightly last week but remain in the mid-6s, encouraging some potential buyers to come off the sidelines. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.66%, up from the week prior’s 6.62%. A year ago at this time, the 30-year FRM averaged 6.33%. This is the second consecutive week of increases, but just the second since October. Rates have fallen more than a full percentage point since then, giving homebuyers more breathing room as they struggle against record-high unaffordability. The 15-year fixed rate bucked this trend and fell for a second week, from 5.89% to 5.87%. A year ago, it averaged 5.52%. Freddie Mac Chief Economist Sam Khater noted that even as rates…

Rates Remain Effectively Unchanged At 6.62%

Mortgage rates remained basically unchanged last week as markets adjust to economic expectations for 2024. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.62%, inching up from the week prior’s 6.61%. A year ago at this time, the 30-year FRM averaged 6.48%. This is the first increase since October. Rates have fallen more than a full percentage point since then, giving homebuyers more breathing room as they struggle against record-high unaffordability. The 15-year fixed rate dropped, however, from 5.93% to 5.89%. A year ago, it averaged 5.73%. Freddie Mac Chief Economist Sam Khater ascribed the news to the slow machinations of the market as it “digests incoming economic data.” He pointed out that rates stopped their…