The housing market is emerging from its deep freeze with the recent drop in mortgage rates, according to Freddie Mac.
The average rate for a 30-year fixed-rate mortgage fell to 6.13% for the week ending Jan. 26, according to Freddie Mac’s Primary Mortgage Market Survey, a decrease from the previous weeks’ average at 6.15%. However interest rates remain significantly higher than last year when it was south of 3.55%.
The average rate for a 15-year mortgage was 5.17% last week, down from 5.28% the week before, as compared to last year at 2.80%. Mortgage rates have now dropped for a few weeks in a row, helping to fuel buyer demand, according to Freddie Mac Chief Economist Sam Khater.
“Mortgage rates continue to tick down and, as a result, home purchase demand is thawing from the months-long freeze that gripped the housing market,” Khater said in a statement. “Potential homebuyers remain sensitive to changes in mortgage rates, but ample demand remains, fueled by first-time homebuyers.”
Rates are likely to stabilize in the 6% to 7% range
Signs that inflation is softening are expected to help slow the pace of interest rate increases this year. Next week, the Federal Reserve is expected to raise rates by 25 basis points veering away from the more aggressive 75 basis points and 50 basis points rate hikes it undertook last year, according to Realtor.com Senior Economist George Ratiu.
Mortgage rates will likely stay in the 6% to 7% range as the Fed continues to work toward a 2% inflation target, Ratiu said. At that range, with home prices still elevated, it has continued to create affordability challenges for many homebuyers.
Yet, some have found that the current market dynamics have created opportunities. “In addition to high costs, concerns about economic uncertainty also had many buyers pausing their purchasing decisions and led to fewer transactions,” Ratiu said. “However, decreased competition may have presented opportunities for some first-time home buyers, whose share of purchases increased slightly to 31% in December 2022, compared to 28% in November.”
A JESCORP FUNDING mortgage professional is ready to discuss the purchase or refinance option that best suit your borrowing needs. Please feel free to contact us at (888) 922-5989 or send a reply below. One of our associates will get back to you promptly.
