Mortgage rates dropped for a second consecutive week as the market reacted to recent bank failures. The decline is welcome news for the start of the spring homebuying season, according to Freddie Mac.
The average rate for a 30-year fixed-rate mortgage dropped to 6.42% for the week ending March 23, according to Freddie Mac's Primary Mortgage Market Survey. That's down from the previous week when it averaged 6.6%. The rate remained significantly higher than last year when it was 4.42%.
The average rate for a 15-year mortgage was 5.68% this week, down from 5.9% the week before and up from 3.63% last year.
Ironically, the two-week decline in mortgage rates, which returned some stability to the housing market, comes from volatility in the banking sector, according to Freddie Mac Chief Economist Sam Khater.
"Mortgage rates continued to slide down as financial market concerns came to the fore over the last two weeks," Khater said in a statement. "However, on the homebuyer front, the news is more positive with improved purchase demand and stabilizing home prices.
"If mortgage rates continue to slide over the next few weeks, look for a continued rebound during the first weeks of the spring homebuying season," Khater continued.
If you are looking to take advantage of lower mortgage rates by refinancing your mortgage loan, or are ready to shop for the best rate on a loan, consider visiting an online marketplace like Credible to compare rates, choose your loan term and get preapproved with multiple lenders at once.
HOUSEHOLD BILLS COST AMERICANS 42% OF THEIR SALARY: SURVEY
Existing home sales jumped 14.5% in February from the month before to a seasonally adjusted annual rate of 4.58 million, registering the most significant monthly percentage increase since July 2020, according to the National Association of Realtors (NAR).
At the same time, the data showed that home prices dropped 0.2% from a year ago, with the median existing-home price coming in at $363,000 in February.
"Conscious of changing mortgage rates, homebuyers are taking advantage of any rate declines," NAR Chief Economist Lawrence Yun said. "Moreover, we're seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs."
If you want to take advantage of interest rates before they potentially go up, you could consider shopping for the right mortgage. Visit Credible to speak with a mortgage expert and get your questions answered.
RETIREMENT PLAN BALANCES DECREASED BY NEARLY 25% IN 2022
On Wednesday, the Federal Reserve announced another 25 basis point interest rate increase, bringing the federal funds rate to a targeted range of 4.75% to 5%, the highest level in 15 years.
However, Fed Chair Jerome Powell said the recent bank failures could lead to tighter lending requirements, which could help further cool inflation. Until the impact is known, Powell noted that the Fed would proceed with a wait-and-see approach regarding future interest rate increases.
February's Consumer Price Index (CPI), a measure of inflation, came in at 6%, showing that inflation is moderating since hitting a record high of 9.1% last June. The Fed's goal is to bring inflation to a target rate of 2%.
"Ongoing affordability challenges weigh on buyers and sellers preparing for the spring housing market," Realtor.com Economic Data Analyst Hannah Jones said in a statement. "Each downward tick in mortgage rates is met with increased buyer demand, as many eager home shoppers take advantage of the slightly lower cost of financing a home."
The slowdown in home prices and lower interest rates have made buying a home more affordable for some. If you are ready to shop for a mortgage loan or are looking to refinance an existing one, you can use the Credible marketplace to compare rates and lenders and get a mortgage preapproval letter in minutes.
MOST AMERICANS SUPPORT BIDEN'S STUDENT LOAN FORGIVENESS PLAN, SURVEY SAYS
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