Mortgage rates saw a slight dip this week, offering a modest reprieve for potential home buyers and sellers, though the relief is minimal amidst persistently sluggish demand.
According to Freddie Mac’s latest Primary Mortgage Market Survey released on Thursday, the average rate for the 30-year fixed mortgage fell to 6.63% this week, down from 6.69% the previous week. However, it remains substantially higher than the 6.09% rate recorded a year ago.
Similarly, the rate for the 15-year fixed mortgage also saw a marginal decrease, averaging 5.94% compared to 5.96% last week. A year ago, the rate for the 15-year fixed note stood at 5.14%.
Despite these slight adjustments, mortgage rates have largely lingered in the mid-6% range over the past few months. While there have been occasional upticks in demand, overall activity in the housing market has stagnated.
The Mortgage Bankers Association (MBA) noted in its Wednesday report that purchase applications declined last week, attributing the drop to persistently low inventory levels driving up home prices amidst a growing affordability challenge.
Realtor.com data indicates that the approximately 1% decline in rates since October spurred increases in pending home sales and new home sales, alongside a rise in listings. However, overall volume remains approximately 18% lower compared to the previous year, as elevated prices and interest rates continue to deter many potential buyers and sellers.
Realtor.com economist Jiayi Xu emphasized the need for a more substantial improvement in mortgage rates to incentivize more sellers to enter the market. Xu stated, “Despite the promising increase in listing activity, inventory is likely to remain low as sellers may not respond as swiftly as anticipated.” She continued, “If for-sale inventory fails to meet the demand from buyers, there is a possibility that prices may start to climb once again, contributing to the persistence of higher home prices.”
