Mortgage Rates Fall for 5th Week in a Row to 7.22%
The Freddie Mac fixed rate for a 30-year mortgage dropped 0.07 percentage points to 7.22 percent this week. This decline is attributed to mixed messages from the Federal Reserve regarding inflation and interest rate hikes. Despite some policymakers expressing confidence in the current monetary policy, others emphasized the potential need for additional rate hikes to achieve the 2% inflation target over a reasonable timeframe.
Many investors believe that the Federal Reserve has concluded its interest rate hike cycle, as the 10-year yield dropped below 4.3% for the first time since September. This shift in the mortgage rate trend may alleviate the urgency for consumers to make hasty decisions when purchasing a home.
What it Means for the Housing Market
According to Realtor.com’s 2024 Forecast, the average mortgage rate is projected to be 6.8% in the next year. As mortgage rates are expected to remain elevated, current homeowners with low mortgage rates may stay put, leading to a decline in for-sale inventory. Affordability remains the top concern in home purchasing, with the outlook for home sales in 2024 projected to remain steady at lower levels.
However, there is good news for prospective homebuyers. Affordability is expected to turn around in 2024, albeit at a slower pace, through a combination of lower mortgage rates and lower prices brought about by cooling inflation and a less frenzied housing market.
Orginal article: Link To Article – provided by Kansas City Realtors