Mortgage Rates Drop Slightly Amid Economic Data Lull
Mortgage rates have experienced a modest decline this week as economic data releases have taken a backseat. Freddie Mac's data shows that the average 30-year fixed-rate mortgage dipped to 6.85% from 6.87% the previous week. The average 15-year mortgage rate also decreased from 6.09% to 6.04%.
Despite recent inflation figures exceeding expectations, financial markets have remained largely unfazed. This week's absence of significant data releases has not altered investors' perspectives on inflation and the Federal Reserve's future rate path. As a result, 10-year Treasury yields, which closely align with mortgage rates, have remained steady at around 4.5%.
While mortgage rates have gradually decreased in recent weeks, they remain close to 7%, a level that continues to pose affordability challenges for potential homebuyers. Mortgage applications to purchase a home have fallen 6% compared to the previous week, while refinancing applications have declined by 7%. The Mortgage Bankers Association (MBA) reports that this represents the lowest level of applications for the year.
"Many prospective homebuyers are delaying their entry into the market in anticipation of improved supply and affordability," stated Bob Broeksmit, President and CEO of the MBA.
However, Sam Khater, Freddie Mac's chief economist, expressed optimism in a statement, noting that five consecutive weeks of rates below 7% may boost buyer and seller confidence as the spring home-buying season approaches. "This stability provides a positive outlook for both buyers and sellers as we enter the spring buying season," he stated.