Home affordability might have slightly improved this week. Freddie Mac reports mortgage rates appear to have reversed course, at least for now.
“Mortgage rates decreased for the second consecutive week,” said Sam Khater, Freddie Mac’s chief economist. “Given the news that inflation eased slightly, the 10-year Treasury yield dipped, leading to lower mortgage rates. The decrease in rates, albeit small, may provide a bit more wiggle room in the budgets of prospective homebuyers.”
As of now, here are where rates stand:
The 30-year FRM averaged 7.02% as of May 16, down from last week when it averaged 7.09 percent. A year ago at this time, the 30-year FRM averaged 6.39 percent.
The 15-year FRM averaged 6.28%, down from last week when it averaged 6.38%. A year ago at this time, the 15-year FRM averaged 5.75%.
Should this trend continue for several more weeks, affordability could improve. But real estate experts tell us that the housing market needs a lot more listings to really help buyers.
‘May move the needle slightly’
“Interest rates will move the needle slightly, but that is like the tail wagging the dog,” Greg Clement, CEO at Realeflow told ConsumerAffairs recently. “ The dog is simply the number of residential properties in America, and that needs to increase.”
Inventory levels affect home prices. Fewer homes on the market mean sellers can set higher prices. At the end of March, housing inventory totaled 1.11 million units, nearly 5% higher than in February – homeful sign. But that has yet to dampen prices.
The National Association of Realtors (NAR) recently reports that more than 90% of U.S. metro markets posted home prices increases in the first quarter of 2024.