Experts predict stability through spring, with potential rate cuts by summer
Freddie Mac’s latest Primary Mortgage Market Survey reveals a steady mortgage landscape, with the average rate for a 30-year fixed-rate mortgage (FRM) slightly increasing to 6.64% as of February 8. This minor change follows a period of stability in mortgage rates, reflecting broader economic conditions.
A year ago, the 30-year FRM averaged 6.12%, while the 15-year FRM has seen a small dip from last week to 5.90%, compared to 5.25% the previous year. Despite the current stability in mortgage rates, challenges persist in the housing market, primarily due to high home prices, the low supply of homes, and affordability issues, particularly for first-time and low-income homebuyers.
“Mortgage rates remain stagnant, hovering in the mid-6% range over the past several weeks,” Freddie Mac’s chief economist Sam Khater said. “The economy and labor market remain strong with wage growth outpacing inflation, which is keeping consumer spending robust.”
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Other experts weighed in on the future of mortgage rates and the housing market, with CoreLogic’s chief economist Dr. Selma Hepp having an optimistic outlook for prospective homebuyers.
“The US economy continues to show signs of strength, so therefore, rates are likely to remain stable through the spring homebuying season, with cuts not expected until the beginning of summer,” Hepp said. She also noted a positive shift in buyer sentiment: “In recent industry surveys, homebuyers are beginning to feel optimistic about where rates are heading and more and more homebuyers are anticipating rates to decline through the year.”
Meanwhile, Holden Lewis, from NerdWallet, attributed the recent uptick in mortgage rates to a robust job market.
“Mortgage rates went up in the last week because businesses continue to create new jobs, and employees are getting raises,” he said. “Investors believe the strong job market will keep inflation elevated,” which he said has nudged mortgage rates higher due to concerns about ongoing inflation.
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