LOS ANGELES— The average long-term U.S. mortgage rate edged higher this week, reflecting a recent uptick in the 10-year Treasury yield.
The average rate on a 30-year mortgage rose to 6.64% from 6.63% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.12%.
“Mortgage rates remain stagnant, hovering in the mid-6% range over the past several weeks,” said Sam Khater, Freddie Mac’s chief economist.
The move echoes an increase this week in the 10-year Treasury yield, which lenders use as a guide to pricing loans. The yield moved above 4% this week as bond traders reacted to the government’s January’s jobs report. The surprisingly strong report stoked worries that it could persuade the Federal Reserve to wait longer before it begins cutting interest rates.
Hopes for such cuts amid signs that inflation has declined from its peak two summers ago have been a major reason the 10-year Treasury yield has mostly pulled back since October, when it climbed to its highest level since 2007.
In an interview broadcast Sunday night, Fed Chair Jerome Powell said that the central bank remains on track to cut its benchmark interest rate three times this year, a move that economists expect could begin as early as May.
Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.
The cost of refinancing a home got a little bit less expensive this week. Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, fell this week, pulling the average rate down to 5.90% from 5.94% last week. A year ago, it averaged 5.25%, Freddie Mac said.
The cost of financing a home has been mostly easing since late October, when the average rate on a 30-year mortgage hit 7.79%, the highest level since late 2000. So far this year, the weekly average has ranged between 6.60% and 6.69%.
The overall decline in rates since their peak last fall has helped lower monthly mortgage payments, providing more financial breathing room for homebuyers facing rising prices and a shortage of homes for sale as the spring homebuying season nears.
Still, the average rate on a 30-year mortgage remains sharply higher than just two years ago, when it was 3.69%.
Many economists are projecting that mortgage rates will continue heading lower this year, though forecasts generally have the average rate on a 30-year home loan hovering around 6% by the end of the year.
“Homebuyers should expect mortgage rates to move lower as we head through 2024, but that does not necessarily mean it will be easier to buy a home,” said Lisa Sturtevant, chief economist at Bright MLS. “Waiting to buy later this year might mean a buyer can get a lower rate, but prices are still rising, and inventory will still be tight, which means the market will still be competitive.”
Elevated mortgage rates and a dearth of available homes have kept the U.S. housing market mired in a slump the past two years. Sales of previously occupied U.S. homes sank to a nearly 30-year low last year, tumbling 18.7% from 2022.
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Sadly for some time we see a number of sellers who are not keeping up with the changes locally; often putting their homes on the market and selling them for less than what the market can bear. Additionlly; selling a home the first day on MLS may not guarantee the best price for the seller / homeowner. Please call Barry at 239-360-5527 for more information.
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Even with Hurricane Ian having passied thrugh Southwest Florida last year, as people continue to move and relocate to the general areas of Lee & Collier Counties; aka: Paradise Coast from other parts of the United States, it is important that we are able to directly serve all of the area; which we do, efficently. We have the ability to offer many different Choices, Price-Points and Lifestyles all of which are in abundance here in SW FLA, 239RealEstateDeals.Com LLC has blanket coverage of Southwest Florida and most of Florida for that matter by being active members of four different MLS systems. Additionally we have the latest cutting edge technologies in house with many systems in place to better serve our customers and clients who we represent.
Inventory remains steady, but is increasing overall; we do continue to list and market new South Florida property listings to the marketplace and we sell many different type homes; Resale & New Construction; Multigenerational Family Compounds, Single Family Homes, Villas, Townhomes and all Condo types, from low rise, to Waterfront high rise right on the Beach / Gulf Coast. We have something for everyome from beach lovers, boaters, golfers, nature lovers to farmers and horse lovers.
We continue to see many people planning ahead, and buying that second home now, rather than waitiang as they were planning to do; especially with Snowmads and Zoombirds working from home. Previously we had Snowbirds; interesting how terminology keeps changing / evolving. Hurricane Ian prompted some buyers to start looking again, while other buyers had pulled back momentarily.
Interest rates increases have sadly driven some buyers out of the market place, we do see price reductions on some overpriced and / or under marketed listings. Even with recent interest rate hikes, buyers are still looking, but showing more prudency than before as we Secure Real Estate Deals for them. Properties are still selling as it trends towards a more balanced market.
Relatively low inventory overall is still a challenge for active buyers who are not prepared on some property types; but if prepared you are ahead of the game; ask how we can help with all of that. We do see more listings coming to the market here in Southwest Florida, so, that is good.
We recently got a number amazing deals for buyers; even during the recent Hot Sellers Market; and we are working on others as our market changes a little having gone through a hurricane. There are deals out there; if you work with us, we will definitely find them for you.
For those relocating to Florida (and to other areas), we are pleased to be able to efficently assist homeowners in other parts of the United States who need to sell to buy here; please reach out today for more information and how you can have a smooth, non-stressful transition / relocation with the best available representation. Call Barry at 239-360-5527.
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