Mortgage rates drop again in latest Freddie Mac poll
The rate on a 30-year fixed mortgage fell two more basis points to 2.94% this week, according to Freddie Mac.
Mortgage rates plunged in 2020 as the U.S. economy sagged during the coronavirus pandemic. This trend reversed in 2021 when the economy rebounded, but in April, rates started to fall again. It is still likely that this year will end with higher rates, but they are expected to remain low by historical standards.
In a separate Bankrate survey, the 30-year average rate rose slightly, averaging 3.19%, underlining the current unpredictability of the market. The variance with the Freddie Mac count is due to the fact that Bankrate’s figure includes points and set-up charges averaging 0.32%, while the Freddie count excludes those costs. Freddie Mac said his rate was accompanied by an average of 0.8 points.
“Since the most recent peak in April, mortgage rates have fallen almost a quarter of a percent and remained below 3 percent last month,” said Sam Khater, chief economist at Freddie Mac, in a statement. “Low rates give homeowners the opportunity to lower their monthly payment by refinancing, and our most recent research shows that many borrowers, especially black and Hispanic borrowers, who might benefit from refinancing, are still not pursuing this option. . “
As Khater said, lower mortgage rates are great for refinancers, but the current market for potential buyers is more mixed. Low mortgage rates remain a positive factor, but the limited supply of housing coupled with increased borrowing power pushes up prices and increases competition significantly in most communities. The mortgage and real estate markets can be especially cutthroat for low-income and minority homeowners, which may be part of the reason why more black and Hispanic homeowners haven’t refinanced.
Where do mortgage rates go from here?
In the weeks and months to come, the mortgage market could see fluctuations, and the downward trend is almost certain to reverse over time. However, most industry watchers believe rates will remain very low by historical standards, perhaps for years to come, even if they continue to rise slightly.
Meanwhile, most mortgage experts polled by Bankrate expect rates to hike in the coming week.
“Inflation is rising, and so are rates,” said Joel Naroff, president and chief economist of Naroff Economic Advisors in Holland, Pennsylvania.