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Mortgage rates experience a “summer plunge” as the federal government maintains the status quo – News

Benchmark mortgage rates have been on a downward trend over the past week after Federal Reserve Chairman Jerome Powell told lawmakers that the central bank would not change its strategy soon.

30-year fixed-rate mortgages averaged 2.88% for the week to July 15, down 2 basis points from last week’s Freddie Mac.

Report on Thursday.. Since peaking at 3.18% in April, interest rates on 30-year mortgages have now fallen to 30 basis points, or nearly one-third of 1%.

Fixed-rate mortgages for 15 years increased by 2 basis points to an average of 2.22%, and 5-year Treasury indexed hybrid adjustable mortgages decreased by 5 basis points to an average of 2.47%.

“The 30-year fixed-rate mortgages have fallen for the third straight week, and mortgage rates continue to plummet in the summer,” said Sam Carter, chief economist at Freddie Mac. “This decline is not significant, but it does provide modest relief for borrowers buying in markets with high home ratings and low inventories.”

Last week’s mortgage rate movement confirmed that the Fed is very in the driver’s seat when it comes to recent interest rate trajectories. While testifying in the Senate, Powell once again reiterated his position that current inflation would be temporary, and that the Fed was set to maintain its current approach to monetary easing. Is shown.

But the Fed’s way to grease skids in the mortgage market isn’t just about keeping short-term interest rates low. “As important as loan rates, the Fed is expected to maintain $ 40 billion in monthly mortgage-backed securities purchases,” said George Latiu, senior economist at Realtor.

“In short, the Fed thinks there’s still more work to be done to get the economy back on track, which will keep mortgage rates low for the rest of the year,” Latiu added.

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However, low rates are not the only reason for homebuyers’ celebrations. According to data, new listings on the market last week increased by 5% following a drop around the July 4 holiday. Today, total inventories of homes for sale have fallen by just 35% compared to a year ago, the 14th consecutive week of diminished year-on-year declines.

Some buyers may have withdrawn from the market as they continued to face fierce competition for housing and rising prices. Those who are stuck may face a less stressful home shopping experience in the coming months as inventory improves and competition for available properties decreases.

Mortgage rates experience a “summer plunge” as the federal government maintains the status quo

Source link Mortgage rates experience a “summer plunge” as the federal government maintains the status quo



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