Mortgage Rates Rise to 6.69%: Hope for Improved Affordability
Are you in the market to buy a house? Well, now might be the perfect time to make your move! According to Freddie Mac, the average rate for a 30-year mortgage loan has risen to 6.69% from 6.60% a week prior. However, don’t let that minor climb discourage you, as mortgage costs have actually dropped more than 110 basis points over the last three months since the peak of 7.79% in October.
This trend is sparking hopes for improved affordability, as rates are expected to continue to decrease. While rates are still higher than the average in 2021 and 2022, consumers are showing increased interest in the housing market. More buyers are applying for mortgages, indicating a belief that home prices will also decrease along with mortgage rates.
Mark Palim, vice president and deputy chief economist at Fannie Mae, shared some insights with Yahoo Finance, stating that home sales are forecasted to pick up around 4% this year, with an even higher increase of nearly 14% in 2025. This growth is attributed to the lower mortgage rates working their way through the system.
Homebuyers are starting to see a glimmer of hope, with mortgage applications increasing by 3.7% from the previous week, according to the Mortgage Bankers Association. The seasonally adjusted purchase index, measuring new home loans, jumped 8% week over week. This increase in buyers’ mortgage activity is paralleled by a rise in homebuyers’ confidence, as shown in the latest Home Purchase Sentiment Index surveyed by Fannie Mae.
Looking ahead, economists at Fannie Mae predict that slowing economic growth in 2024 will bring rates down to around 5.8% by the end of the year. This rate cut is expected to be influenced by the Fed easing, with the possibility of four rate cuts throughout the year. However, the first cut may come later than anticipated, as inflation remains higher than the Fed’s targeted 2%.
So, if you’ve been considering buying a home, now may be the time to take advantage of the improving affordability and growing optimism in the housing market. Keep an eye on mortgage rates and market trends to make the most informed decision for your future home purchase. Happy house hunting!
Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial advice. The content is based on general research and may not be accurate, reliable, or up-to-date. Before making any financial decisions, it is recommended to consult with a professional financial advisor or conduct thorough research to verify the accuracy of the information presented. The author and publisher disclaim any liability for any financial losses or damages incurred as a result of relying on the information provided in this article. Readers are encouraged to independently verify the facts and information before making any financial decisions.