Mortgage rates fall back below 7%

Mortgage rates fell back below 7% this week, which might help boost sluggish home sales - Photo by ConsumerAffairs

High interest rates are beginning to affect home sales and prices

Potential buyers who have been waiting for home prices and mortgage rates to ease a bit are being rewarded. A report by real estate broker Redfin shows home prices are falling in some of the most expensive markets. At the same time, Freddie Mac reports the average 30-year fixed-rate mortgage (FRM) has dipped back below 7%.

“Mortgage rates retreated this week given incoming data showing slower growth,” said Sam Khater, Freddie Mac’s Chief Economist. “Rates are just shy of 7%, and we expect them to modestly decline over the remainder of 2024. If a potential buyer is looking to buy a home this year, waiting for lower rates may result in small savings, but shopping around for the best rate remains tremendously beneficial.”

Current rates

  • The 30-year FRM averaged 6.99% as of June 6, 2024, down from last week when it averaged 7.03%. A year ago at this time, the 30-year FRM averaged 6.71%.

  • The 15-year FRM averaged 6.29%, down from last week when it averaged 6.36%. A year ago at this time, the 15-year FRM averaged 6.07%.

Home sales stall

Redfin reports that home-sale prices are declining year over year in four major U.S. metros, three of them in Texas. The average price in Austin is down 2.9%, San Antonio’s average price is down 1.2%) while home prices in Fort Worth are also 1.2% lower.

Buyers in Portland, Ore., are also seeing slight relief with the average sale price dipping 0.9%. The last time prices fell in four or more metros was in January.

Redfin says some listings are growing stale because high mortgage rates and housing costs are causing would-be buyers to back off. The weekly average mortgage rate rose back above 7% last week, pushing the median U.S. monthly housing payment to a near-record-high of $2,838.

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