Mortgage Rates Hold Steady Amidst Market Volatility
Mortgage rates remained largely unchanged this week, despite a market sell-off that spurred investors to seek safe haven assets.
According to Freddie Mac data, the average 30-year fixed mortgage rate stood at 6.95%, while the 15-year fixed rate marginally declined to 6.12%.
"Higher rates and persistent supply shortages continue to hinder affordability for many homebuyers, keeping them on the sidelines," said Freddie Mac's Chief Economist, Sam Khater.
Despite Monday's stock market selloff, which saw investors fleeing tech stocks, Treasury yields, closely linked to mortgage rates, remained steady. However, they slightly increased on Wednesday after the Federal Reserve maintained its benchmark interest rates.
Mike Fratantoni, Chief Economist for the Mortgage Bankers Association, predicts that "with the Fed on hold, longer-term rates, including mortgage rates, will continue to fluctuate within a narrow range."
Signs suggest that higher rates are impacting home sales. The National Association of Realtors reported a 5.5% decline in housing contract activity in December compared to the previous month. The steepest declines were observed in expensive markets like the West and Northeast, where elevated rates exacerbate affordability concerns.