Finally, home buyers may have the wind at their backs
of ConsumerAffairs
Home affordability may finally be improving a bit after months of mortgage rates near 7% or higher. Freddie Mac reports its Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaged 6.47% this week.
Mortgage rates plunged this week to their lowest level in over a year following the likely overreaction to a less than favorable employment report and financial market turbulence for an economy that remains on solid footing," said Sam Khater, Freddie Mac's chief economist.
"The decline in mortgage rates does increase prospective homebuyers purchasing power and should begin to pique their interest in making a move.
At the same time, Khater said the drop in mortgage rates is already providing some existing homeowners the opportunity to refinance, with the refinance share of market mortgage applications reaching nearly 42%, the highest since March 2022.
Will this trend continue? It could. The bond market rallied when the stock market sold off Friday and Monday, driving the yield on the 10-year Treasury note to its lowest level in over a year.
Since mortgage rates are largely keyed to the 10-year note, that could push mortgage rates even lower before the Federal Reserve cuts interest rates.
However, falling mortgage rates could have one unintended consequence that could be bad for buyers. If it brings a flood of buyers to the market it could keep home prices high.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-08-08 16:23:11
