The 30-year mortgage rate continued on its downward trajectory this week, though just barely, according to Freddie Mac.
The government-sponsored enterprise on Thursday released its Primary Mortgage Market Survey, which showed that the 30-year fixed-rate mortgage (FRM) averaged 6.27%, down just 1 basis point from a week earlier. The 15-year fixed-rate mortgage also fell.
Still, the small drop marked the fifth straight week of declines.
“Incoming data suggest inflation remains well above the desired level but showing signs of deceleration,” said Sam Khater, Freddie Mac’s chief economist. “These trends, coupled with tight labor markets, are creating increased optimism among prospective homebuyers as the housing market hits its peak in the spring and summer.”
Mortgage Rates
- The 30-year fixed-rate mortgage averaged 6.27% as of April 13, down from last week when it averaged 6.28%. A year ago, the rate averaged 5%.
- The 15-year fixed-rate mortgage averaged 5.54%, down from last week when it averaged 5.64%. A year ago, the rate averaged 4.17%.
Fannie Mae’s PMMS is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
Realtor.com Chief Economist Danielle Hale said the 30-year rate is now just 127 basis points higher than a year ago, the smallest gap in over a year.
“Bond yields have bounced back from last week’s lows as recent data — including last Friday’s jobs report — signaled a moderating, but still relatively strong job market,” Hale said, “suggesting that the decline in job openings registered in February’s … report may not have heralded a broader weakening in the labor market.”
Still More To Do
Hale continued, “This week’s inflation data, based on the consumer price index, much like a rorschach test, left plenty of room for interpretation. On the one hand, the fact that inflation is still running at more than twice the target level, and core inflation — which includes goods and services excluding volatile food and energy — saw an uptick to 5.6% in March, highlights that the Fed still has more to do and may need to lift short-term rates again at its early May meeting.”
“On the other hand,” she said, “overall inflation slowed more notably, and even core inflation on a month-to-month basis eased somewhat, a sign that the Fed's tightening is having the desired effect.”
Hale said that even if the Fed needs to raise short-term rates a bit higher, “we are very likely nearing the end of the tightening cycle. As long as the economy continues to see progress on inflation, that should help keep mortgage rates at the lower end of the 6 to 7% range that we've seen over the past few months. However, any surprises in the data will likely lead to some volatility in that range.”
She added that, with both homebuyers and potential sellers feeling “rather dour” about the real estate market, especially with respect to the outlook for mortgage rates, “the number of homes sold will continue to be lower than one year ago for the next few months.”
