Mortgage Rates Hold Steady Amid Market Volatility
Mortgage rates remained largely unchanged this week, despite a significant market sell-off earlier in the week. As of Wednesday, the average 30-year mortgage rate stood at 6.95%, nearly identical to the previous week's 6.96%, according to Freddie Mac. The 15-year mortgage rate also saw a slight decline to 6.12% from 6.16%.
The market turmoil, triggered by a sell-off in US technology stocks, initially caused investors to seek refuge in safe-haven assets like US Treasurys. This typically leads to lower Treasury yields, which are closely linked to mortgage rates. However, the Federal Reserve's decision to hold off on further interest rate cuts caused Treasury yields to rise slightly on Wednesday, offsetting the downward pressure from the stock market sell-off.
Despite the relatively stable rates, affordability remains a challenge for many homebuyers. "Driven by these higher rates and a persistent supply shortage, affordability hurdles still exist for many homebuyers," said Sam Khater, Freddie Mac's chief economist.
Industry experts anticipate that mortgage rates will continue to fluctuate within a narrow range in the near term, echoing the Fed's dovish stance.
"With the Fed on hold, we do expect that longer-term rates, including mortgage rates, will also stay within a narrow range for the foreseeable future," commented Mike Fratantoni, chief economist for the Mortgage Bankers Association.