The interest rate for a 30-year loan hover near the best levels since September, nearly a whole percentage point down from a 7.08% peak just two months ago.
Affordability woes are still spooking buyers, but another decrease in mortgage rates could bring them back to the market. The interest rate for the 30-year mortgage averaged 6.13% last week, Freddie Mac reports, nearly a whole percentage point drop from a 7.08% peak just two months ago. This could boost homebuyer confidence and help dig the real estate market out of a “housing recession.” To boot, mortgage applications for home purchases have been inching up, rising 3% last week, the Mortgage Bankers Association reports.
“Homebuying activity remains tepid, but if rates continue to fall and home prices cool further, we expect to see potential buyers come back into the market,” says Joel Kan, an MBA economist. “Many have been waiting for affordability challenges to subside.”
Nadia Evangelou, senior economist and director of forecasting at the National Association of REALTORS®, says that mortgage rates could fall even further in the weeks ahead as investors anticipate the Federal Reserve’s next move. The Fed plans to vote for a smaller rate hike at its meeting next week due to signs of easing inflation. “A stronger housing market could help the U.S. economy skirt a recession,” Evangelou adds.
