Mortgage rates stayed the course in the most recent week, despite the U.S. Federal Reserve leaving interest rates unchanged with the possibility of cutting later in the year.
Though the market is hopeful for an interest rate cut in May based on the CME’s FedWatch tool, mortgage rates — which are influenced but not directly impacted by the Fed — barely budged in the latest week as the economy continues to show signs of strength, including a January robust jobs report.
Still, forecasters are expecting rates to come down to the 6% range by the end of 2024.
The 30-year fixed-rate mortgage rose and averaged 6.64% as of February 8, according to data released by Freddie Mac
FMCC,
on Thursday.
It’s up 1 basis point from the previous week — one basis point is equal to one hundredth of a percentage point.
A year ago, the 30-year was averaging at 6.12%.
The average rate on the 15-year mortgage was 5.9%, down from 5.94% last week. The 15-year was at 5.25% a year ago.
Freddie Mac’s weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage.
Separate data by Mortgage News Daily said that the 30-year fixed-rate mortgage was averaging at 6.95% as of Thursday afternoon.
What Freddie Mac said: “Affordability in the housing market is an ongoing issue due to continued high home prices, elevated mortgage rates and low supply of homes on the market, particularly for first-time and low-income homebuyers,” Sam Khater, chief economist at Freddie Mac, said in a statement.
What are they saying? “Homebuyers may be feeling like the lower mortgage rates they’ve been promised in 2024 are not materializing,” Lisa Sturtevant, chief economist at Bright MLS, said in a statement.
“Rates haven’t fallen in early 2024 as a result of uncertainty about the economy and the timing of the Fed’s rate cuts,” she explained, but buyers “should expect mortgage rates to move lower as we head through 2024.”
