Good news for those hoping for more decreases in mortgage rates this week, however the same challenges persist regarding affordability and inventory, preventing a meaningful break in the hindered housing market.
The 30-year fixed rate mortgage averaged 6.20% this week, down from 6.35% last week, according to the latest Primary Mortgage Market Survey® (PMMS®) released by Freddie Mac Thursday.
This week’s numbers:
- The 30-year FRM averaged 6.20% as of September 12, 2024, down from last week when it averaged 6.35%. A year ago at this time, the 30-year FRM averaged 7.18%.
- The 15-year FRM averaged 5.27%, down from last week when it averaged 5.47%. A year ago at this time, the 15-year FRM averaged 6.51%.
What the experts think:
“Mortgage rates have fallen more than half a% over the last six weeks and are at their lowest level since February 2023,” said Sam Khater, Freddie Mac’s chief economist. “Rates continue to soften due to incoming economic data that is more sedate. But despite the improving mortgage rate environment, prospective buyers remain on the sidelines, as they negotiate a combination of high house prices and persistent supply shortages.”
Realtor.com Sr. Economic Research Analyst Hannah Jones, commented:
“Though the market remains challenging for homebuyers, a few key shifts suggest that more favorable housing conditions may be ahead. Easing employment gains and cooling inflation both bolster expectations of a Fed rate cut next week. The market’s anticipation of rate cuts also has a positive impact on mortgage rates, which continue to move lower. With the mortgage rate side of affordability starting to improve, many buyers hope to see prices do the same.”
Jones added, “Home prices have not fallen considerably at the national level, despite cooling buyer demand, as inventory remains below pre-pandemic levels. However, local market conditions vary greatly. Many Southern markets have seen a significant build-up in inventory, taking some pressure off of prices, while popular Midwest and Northeast markets continue to see high demand and price growth. The market is particularly tough for first-time home buyers who do not have the advantage of existing home equity to leverage into a home purchase.”
