April 6, 2024 | Reading Time: 2.5 Minutes
Mortgage interest rates persist at steady but heightened levels, providing potential homebuyers with a sense of stability as they navigate the market this spring.
According to the latest Freddie Mac survey, the 30-year fixed rate has edged up slightly this week to an average of 6.82%, compared to 6.79% last week and 6.28% a year ago.
Throughout the early months of 2024, rates have maintained a range between 6.6% and 7%, offering little surprise within the financing sector. Forecasts suggest this trend is likely to persist in the near future.
Freddie Mac’s chief economist, Sam Khater, notes, “While incoming economic signals indicate lower rates of inflation, we do not expect rates will decrease meaningfully in the near-term. On the plus side, inventory is improving somewhat, which should help temper home price growth.”
Investor sentiments, crucial in determining rates, are currently influenced by uncertainties surrounding inflation trends. Danielle Hale, Chief Economist at Realtor.com, mentions that upcoming economic reports, such as Friday’s job report and next week’s consumer price index, could significantly impact the direction of rates.
Chen Zhao, Lead of Redfin Economic Research, suggests that the outcome of these reports will influence the timing of potential Federal Reserve rate cuts, potentially affecting mortgage rates later this year.
Regarding mortgage applications, the Mortgage Bankers Association reports no change in home purchase applications compared to the previous week but notes a 13% decline compared to a year ago. Joel Kan, MBA’s chief economist, attributes this decrease to the persistent impact of elevated rates on home buying activity.
The industry is keenly observing whether potential homebuyers respond to recent increases in price reductions and overall inventory levels, which have reached their highest point since 2020.
Additionally, current homeowners are considering the effects of heightened rates on their decisions. According to a survey conducted by John Burns Research & Consulting, the top reason for delaying home shopping in March was the anticipation of a decline in mortgage rates.