After climbing for three weeks, mortgage rates fell this week, albeit they are still unpredictable due to contradictory economic signs. According to information from Freddie Mac posted on Thursday, the 30-year fixed-rate mortgage averaged 6.71% in the week ending June 8, down from 6.79% the week before. The 30-year fixed rate was 5.23% a year ago.
The Biggest Barrier for Homebuyers
According to Sam Khater, chief economist at Freddie Mac, “inventory continues to be the biggest barrier for potential homebuyers, despite elevated rates and other affordability challenges remaining.” Many current homeowners are hesitant to list their properties on the market and exchange their extremely low interest rate for something much higher because rates are far higher now than the fixed rate they originally purchased or refinanced into. Low available housing stock is the result of this.
A little more than a year ago, mortgage rates went above 5% for the first time since 2011, and they have been above 5% ever since, with the exception of one week. Since then, they have increased to 7.08%, which was last attained in November. Rates have fluctuated since mid-March but had been below 6.5% until last week. Based on mortgage applications that Freddie Mac receives from thousands of lenders nationwide, the average mortgage rate is calculated. Only borrowers with great credit and a 20% down payment are included in the survey.
According to Jiayi Xu, an economist at Realtor.com, mortgage rates fluctuate daily as a result of the economy’s volatility and uncertainty, and have been rising in line with the trend of 10-year Treasury yields as investors assess the potential course of the Federal Reserve’s interest rate policy at its meeting next week.
Federal Reserve members alluded to deferring a rate hike in June in speeches last week, allowing the Fed to gather additional information before making any decisions, according to Xu. Although the remarks are not official policy, she said that “policymakers are indicating that the current interest rate may not have reached its peak for this particular economic cycle” by framing the conversation in terms of “skipping” rather than “pausing,”