According to Freddie Mac mortgage rates dropped for the fourth consecutive week in a row. As of April 6th the 30-year fixed-rate mortgage is around 6.28% which is down from 6.32% from the prior week. This still is not as low as it was a year ago when it was reported to be around 4.72%.
“Mortgage rates continue to trend down entering the traditional spring homebuying season. Unfortunately, those in the market to buy are facing a number of challenges, not the least of which is the low inventory of homes for sale, especially for aspiring first-time homebuyers,” says Sam Khater, Freddie Mac’s chief economist.
November 2022 saw high rates at 7.08% but they started to trend down after the new year. The rates rose again when reported in February of 2023. The Federal Reserve has been trying to cool the US economy by upping the benchmark lending rate. In fact, the interest rate was raised a quarter point recently to combat high inflation.
Hannah Jones, economic research analyst at Realtor.com believes that the current banking meltdown will only fuel stricter lending requirements. This will cause a less friendly borrowing environment.
“More expensive, stricter, lending helps to usher in the long-term health of the economy, but the downside is that borrowing for large purchases, including a home purchase, may be relatively more challenging in the short term,” reports Jones.
According to Jones investors have sought out high land in the bond market because of the recent bank instability. “However, as the uncertainty in the financial sector waned, investors shifted away from bonds, pushing bond yields back up. Mortgage rates tend to move with the 10-year Treasury yield, which ticked up this week, but the spread between the two narrowed as mortgage rates moved down and the market continued to navigate ongoing economic uncertainty,” Jones stated.
Jones goes on to explain that buyers will still face elevated mortgage rates and rising home prices. Buying a home will be less accessible than it was this time last year. It is reported that home prices are starting to cool off and the rate decrease is also good for potential buyers. Now is the time to purchase a home if you are in the market. Remember to look to a local sales agent who can help you with a successful home purchase.
