Average US mortgage rates are holding steady at the mid six per cent mark. In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.62 per cent, marginally up from last week when they stood at 6.61 per cent. A year ago, the average rate was 6.48 per cent.
Sam Khater, Freddie Mac’s chief economist, noted that rates were likely to come down further as the year progresses.
He said: “Between late October and mid-December, the 30-year fixed-rate mortgage plummeted more than a percentage point. However, since then rates have moved sideways as the market digests incoming economic data.
“Given the expectation of rate cuts this year from the Federal Reserve, as well as receding inflationary pressures, we expect mortgage rates will continue to drift downward as the year unfolds. While lower mortgage rates are welcome news, potential homebuyers are still dealing with the dual challenges of low inventory and high home prices that continue to rise.”
The 15-year fixed rate mortgage averaged 5.89 per cent, down from 5.93 per cent last week. A year ago, the average stood at 5.73 per cent.
‘Optimism’ that US mortgage rates will fall in 2024
A separate survey from the Mortgage Bankers Association (MBA) noted that rates were marginally up, but below the seven per cent threshold, while applications had fallen over the Christmas holidays.
The MBA reported that the average rate for 30-year fixed rate mortgages rose to 6.76 per cent, up from last week’s 6.71 per cent. Meanwhile, the average rate for the 15-year equivalent fell to 6.26 per cent from 6.41 per cent last week.
Meanwhile, overall mortgage applications decreased by 9.4 per cent from one week earlier.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Markets continued to digest the impact of slowing inflation and potential rate cuts from the Federal Reserve, helping mortgage rates to stay at levels close to the lowest since mid-2023. The 30-year fixed mortgage rate edged higher last week and ended 2023 at 6.76 per cent, over a percentage point lower than its recent peak of 7.9 per cent in October 2023.
“The recent decline in rates has given the housing market some cause for optimism going into 2024, but purchase applications have not yet picked up in response, with the overall level of purchase activity 12 per cent lower than a year ago. Refinance applications were still at very low levels but were 15 per cent higher than a year ago.
“The housing market has been hampered by a limited supply of homes for sale, but the recent strength in new residential construction will continue to help ease inventory shortages in the months in come.”
