The 30-year, fixed-rate mortgage continued on its downward trajectory this week, with the average falling for the fourth straight week, Freddie Mac said Thursday.
The trend led one housing-industry economist to say there's a chance rates could fall below 6% by the end of 2023.
According to Freddie Mac’s Primary Mortgage Market Survey (PMMS), the 30-year fixed-rate mortgage (FRM) averaged 6.28%. The rate is at its lowest point since Feb. 9, when it was 6.12%.
The average for the 15-year fixed rate, however, increased slightly from a week earlier to 5.56%.
“Mortgage rates continue to trend down entering the traditional spring homebuying season,” said Sam Khater, Freddie Mac’s chief economist. “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.”
Mortgage Rates
- The 30-year fixed-rate mortgage averaged 6.28% as of April 6, down from last week when it averaged 6.32%. The rate averaged 4.72% at this time last year.
- The 15-year fixed-rate mortgage averaged 5.64%, up from last week when it averaged 5.56%. The rate averaged 3.91% at this point last year.
Freddie Mac’s PMMS is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
Below 6% By Year's End?
Lawrence Yun, chief economist for the National Association of Realtors, noted that the current 30-year rate saves borrowers $140 per month on a $300,000 loan compared to the recent 7% average rate peak.
“The fallout from the regional bank collapses has led to tightening lending conditions, though not on residential mortgages,” Yun said. “That is because nearly all mortgages have government guarantees, assuring an eager appetite to provide VA, FHA, and nearly all conforming mortgages to those homebuyers willing to stay within budget.”
While rates can move up and down week to week, Yun said, the longer-term prospect is for further improvement, with “a clear possibility” of going under 6% by the end of the year.
“This is because, with so much apartment construction, the new empty units steadily hitting the market will limit rent growth and calm overall consumer price inflation,” Yun said. "The Federal Reserve can therefore stop tightening. With lower rates, more homebuyers will steadily appear. That is why it is critical to ensure more housing supply to help meet the recovering demand.”
