On Monday, the average rate for the popular 30-year fixed mortgage decreased to 6.57%, as reported by Mortgage News Daily. If the downward trend in rates persists, potential home buyers may become more interested in the housing market once again.
On Monday, Mortgage News Daily reported that the average rate for the popular 30-year fixed mortgage decreased to 6.57%. This represents a decline from Friday’s rate of 6.76% and a recent peak of 7.05% on Wednesday.
The yield on the 10-year Treasury, which tends to influence mortgage rates, has decreased to a one-month low due to the recent difficulties faced by Silicon Valley Bank and Signature Bank. This has caused a ripple effect throughout the banking sector in the United States.
A homebuyer interested in purchasing a $500,000 home and making a 20% down payment on a 30-year fixed mortgage can expect to pay $128 less per month this week than they would have paid last week. However, despite this recent decrease, the monthly payment is still higher than it was in January.
“Analysis: What Implications Will This Have for the Spring Housing Market?”
In October, home sales were adversely affected as mortgage rates soared above 7%. However, towards the end of January, rates had fallen to around 6%, which led to a remarkable 8% increase in pending home sales. The National Association of Realtors uses pending home sales to measure signed contracts on existing homes. Additionally, sales of newly constructed homes, which the Census Bureau monitors through signed contracts, also experienced a significant surge, exceeding expectations.
Although the sales figures for February are not yet available, some agents and builders have reported a significant decline in sales due to the recent increase in interest rates. However, if interest rates decrease again, it is possible that buyers may return to the market. Nonetheless, it remains uncertain whether this will occur.
“This mini banking crisis has to drive a change in consumer behavior in order to have a lasting positive impact on rates. It’s still all about inflation,” said Matthew Graham, chief operating officer at Mortgage News Daily.
Markets now have to contend with the “inflationary impact of consumer fear,” he added, noting that Tuesday brings a fresh consumer price index report, a monthly measure of inflation in the economy.