Mortgage rates edged lower last week, after rising slightly the week before.
The 30-year fixed-rate mortgage averaged 6.33% in the week ending January 12, down from 6.48% the week before, according to Freddie Mac. Last year, the 30-year fixed rate was 3.45%.
“As mortgage rates begin to fall again, the market remains reluctant to rate changes, and consumer demand is facing big changes are related to small changes in prices,” said Sam Khater, Freddie Mac’s chief economist.
“The past few weeks have shown latent demand and buyers jumping in and out of the market as prices move up,” he added.
Mortgage rates are expected to rise through most of 2022, prompting the Federal Reserve’s forecast of heavy interest rate hikes to combat rising costs. But mortgage rates fell in November and December, after data showed inflation may have finally peaked.
Mortgage rates are based on mortgage applications that Freddie Mac receives from thousands of borrowers nationwide. The survey only includes borrowers who put down 20% and have better credit. Most buyers with lower down payments or less credit will pay more than the average rate.
The new data of the weather that is shown on Thursday showed that prices continue to rise in December. That’s good news for people looking for low-cost, secure mortgages.
The Mortgage Brokers Association expects lower mortgage rates throughout the year, said Bob Broeksmit, MBA and CEO, which should bring back more buyers. house in the market.
But in the near future, this range between 6% and 7% may continue, said George Ratiu, manager of economic research at Realtor.com.
“Freddie Mac’s fixed rate for a 30-year loan has fluctuated between 6% and 7% since September 2022 when it crossed 6% for the first time in 14 years,” said Ratiu. “Mortgage rates reflect uncertainty over the 10-year Treasury, as investors grapple with mixed expectations amid a flurry of new economic numbers.”
The Fed does not set the interest rates that borrowers pay directly on mortgages. But his actions affect them. Mortgage rates typically track the yield on 10-year US Treasury bonds, which is based on a combination of expectations about the Fed’s actions, the Fed’s actual actions and responses. of businessmen. When Treasury rates go up, so do mortgage rates; when it goes down, mortgage rates usually follow.
All eyes are on the Federal Reserve and its meeting at the end of January and its plans for monetary tightening, and investors and businesses are looking for signs that the bank may ease the rate increase, said Ratiu.
Family retail sales as prices have risen in the past year. High housing prices and interest rates that doubled last year have pushed many people out of the market.
Home buyers can expect mortgage rates to remain volatile, as we have seen over the past five months, Ratiu said.
This means that it will be more important for consumers shop around.
“For buyers looking for a home to buy, shopping for a mortgage with multiple lenders to secure the lowest price and fees can be endless. with a lower monthly payment, but also with tens of thousands of dollars saved over the life of the loan, ” said Ratiu.