Mortgage rates dropped again, homebuyers noticed. It has been three weeks in a row that the mortgage rates fall again. This is referring to data from Freddie Mac. On March 30, the 30-year fixed-rate mortgage averaged 6.32% in the week, signifying the second fall. A week before, it was 6.42%. Meanwhile, a year ago, the 30-year fixed-rate was 4.67%. Sam Khater, Freddie Mac’s chief economist, argued that economic uncertainty is the reason why the mortgage rates are falling. He added that these weeks’ declining rates brought borrowers back to the market. This is because spring homebuying season is on the market. However, low inventory is still a key challenge for prospective buyers.
Freddie Mac gets thousands of lenders data across the country to make this survey on the average mortgage rate. The survey covers only borrowers who put 20% down and have excellent credit. In 2022, it was hitting a high for as much as 7.08%. But in November, it was starting to decline. Meanwhile, last week, the Federal Reserve raised interest rates for a quarter point. The purpose is to battle high inflation while taking into account recent risks to financial stability. Economic data analysts at Realtor.com, Hannah Jones gave a statement. She said that after last week’s FOMC meeting, markets adjusted to both short and long term implications of high interest rates. Plus, it encountered strict lending requirements.
The Fed does indeed not set the interest rates where borrowers pay on mortgage directly. However, their actions could influence them. Mortgage rates tend to track the yield on 10-year U.S. Treasury bonds. When the treasury yield goes up, mortgage rates also go up. The same thing could happen if the treasury yield goes down.