Mortgage Rates Hold Steady Amid Market Turbulence
Despite a market sell-off, mortgage rates remained largely unchanged this week. According to Freddie Mac data, the average 30-year mortgage rate held steady at 6.95%, while 15-year rates slightly declined to 6.12%.
Sam Khater, Freddie Mac's chief economist, notes that the combination of higher rates and supply shortages continues to challenge homebuyers' affordability.
Market volatility on Monday sparked concerns among investors who dumped US technology stocks. However, Treasury yields, which are closely tied to mortgage rates, initially fell during the market chaos. They subsequently rebounded on Wednesday after the Federal Reserve paused on further rate cuts.
"With the Fed on hold, we anticipate mortgage rates will remain stable in the near term," stated Mike Fratantoni, chief economist for the Mortgage Bankers Association.
Signs of higher rates impacting sales have emerged, with housing contract activity declining 5.5% in December. Decreases were most pronounced in expensive markets such as the West and Northeast, where rates heavily affect affordability.