Mortgage Rates Remain Stable Amidst Market Volatility
Mortgage rates remained largely unchanged this week, despite a significant decline in the stock market that triggered a flight to safety. As of Wednesday, the average 30-year mortgage rate stood at 6.95% and the 15-year rate at 6.12%, according to Freddie Mac.
"Higher rates and a limited supply continue to pose challenges for homebuyers, keeping many on the sidelines," said Freddie Mac's chief economist, Sam Khater.
The stability in rates comes despite a sharp sell-off in tech stocks on Monday, sparked by concerns over artificial intelligence developments. This led to increased demand for US Treasurys, which have a close correlation with mortgage rates. Yields on Treasurys declined on Monday but rose slightly on Wednesday following the Federal Reserve's decision to hold interest rates steady.
"We expect mortgage rates to remain within a narrow range due to the Fed's decision," said Mike Fratantoni, chief economist for the Mortgage Bankers Association.
Signs emerge that higher rates may be impacting the housing market. According to the National Association of Realtors, housing contract activity decreased by 5.5% in December. High-priced regions such as the West and Northeast experienced the most significant decline.
"Elevated rates are squeezing affordability and weighing on sales," said Claire Boston, a senior reporter covering housing for Yahoo Finance.