Mortgage Rates Remain Stable Amidst Stock Market Turmoil
Mortgage rates remained largely unchanged this week, despite a significant stock market sell-off. As of Wednesday, the average 30-year mortgage rate stood at 6.95%, a mere 0.01% decrease from the previous week's 6.96%, according to Freddie Mac. Similarly, 15-year mortgage rates witnessed a slight decline to 6.12% from 6.16%.
Freddie Mac's chief economist, Sam Khater, attributed the continued affordability challenges faced by homebuyers to these elevated rates and the ongoing housing supply shortage.
Monday's market-wide sell-off, triggered by investor concerns over a new AI model from DeepSeek, failed to impact mortgage rates significantly. While Treasury yields initially plunged, they partially recovered on Wednesday following the Federal Reserve's decision to pause benchmark interest rate cuts.
"We anticipate that longer-term rates, including mortgage rates, will remain range-bound in the near future as the Fed adopts a wait-and-see approach to inflation," said Mike Fratantoni, chief economist for the Mortgage Bankers Association.
The impact of these higher rates is evident in the decline of housing contract activity, which fell 5.5% in December. This decline was particularly pronounced in expensive markets like the West and Northeast, where affordability concerns have been exacerbated.