Mortgage rates continue their downward trend this week as the spring market gets underway, the fifth straight weekly decrease. While other market challenges such as high home prices and low inventory persist, lowering mortgage rates are a strong sign for buyers to make their way back into the market.
The 30-year fixed-rate mortgage (FRM) averaged 6.27% this week, down from 6.28% last week, according to the latest Primary Mortgage Market Survey® (PMMS®) released by Freddie Mac Thursday.
This week’s numbers:
- 30-year fixed-rate mortgage averaged 6.27% as of April 13, 2023, down from last week when it averaged 6.28%. A year ago at this time, the 30-year FRM averaged 5%.
- 15-year fixed-rate mortgage averaged 5.54%, up from last week when it averaged 5.64%. A year ago at this time, the 15-year FRM averaged 4.17%.
What the experts think:
“Mortgage rates decreased for the fifth consecutive week,” said Sam Khater, Freddie Mac’s Chief Economist. “Incoming data suggest inflation remains well above the desired level but showing signs of deceleration. These trends, coupled with tight labor markets, are creating increased optimism among prospective homebuyers as the housing market hits its peak in the spring and summer.”
Realtor.com Chief Economist Danielle hale commented:
“This year’s slide coincides with last year’s ramp up, making this week’s rates just 127 basis points higher than one year ago, the smallest gap in over a year. Bond yields have bounced back from last week’s lowes ad recent data, including last Friday’s jobs report, signaled a moderating, but still relatively strong, job market, suggesting that the decline in job openings registered in February’s Job Openings and Labor Turnover report may not have heralded a broader weakening in the labor market.
“This week’s inflation data, based on the current consumer price index, much like a rorschach test, left plenty of room for interpretation. On the on hand, the fact that inflation is still running at more than twice the target level, and core inflation—which includes goods and services excluding volatile food and energy—saw an uptick to 5.6% in March, highlights that the Fed still has more to do and may need to lift short-term rates again at its early May meeting. On the other hand, overall inflation slowed more notably, and even core inflation on a month-to-month basis eased somewhat, as a sign that the Fed’s tightening is having the desired effect. Even if the Fed needs to raise short-term rates a bit higher, we are very likely nearing the end of the tightening cycle. As long as the economy continues to see progress on inflation, that should help keep mortgage rates at the lower end of the 6% to 7% range that we’ve seen over the past few months. However, surprises in the data will likely lead to some volatility in that range.
“With both homebuyers and potential sellers feeling rather dour about the real estate market, especially with respect to the outlook for mortgage rates, the number of homes sold will continue to be lower than one year ago for the next few months. Additionally, with fewer homeowners putting homes up for sale, gains in the number of options for buyers have slowed. Still, even before the recent easing in mortgage rates, buyers and sellers registered some improvement in sentiment toward housing. If the current dip in mortgage rates can be sustained, that will keep buyers on the hunt and perhaps draw more homeowners into the market as sellers. Despite the huge shifts in market momentum, as this year’s best time to sell approaches, home sellers can count on the usual seasonal trends tipping the scales a bit further in their favor while home shoppers should expect a fair amount of competition that should ease as we move later into the year.”
