Mortgage rates rise slightly as homebuyer sentiment tanks
Last Updated on February 9, 2024 by Admin
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Mortgage rates ticked slightly higher this week, with the 30-year fixed rate note continuing to hover in the mid-6% range. The stalled housing market signals consumers still want to hold off on making a move until rates come down, and data indicates homebuyer sentiment is overwhelmingly pessimistic right now.
Freddie Mac’s latest Primary Mortgage Market Survey released Thursday showed that the average rate for the benchmark 30-year fixed mortgage increased to 6.64% this week, up from 6.63% last week. The 30-year average rate was 6.12% a year ago.
A “For Sale” sign is posted outside a home in Teaneck, New Jersey, on Nov. 24, 2022. (Yuvraj Khanna / Bloomberg / Getty Images)
At the same time, the rate on the 15-year fixed mortgage edged lower, averaging 5.9% after coming in last week at 5.94%. One year ago, the rate on the 15-year fixed note averaged 5.25%.
“The economy and labor market remain strong with wage growth outpacing inflation, which is keeping consumer spending robust,” said Sam Khater, Freddie Mac’s chief economist, noting that rates “remain stagnant.”
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“Meanwhile, affordability in the housing market is an ongoing issue due to continued high home prices, elevated mortgage rates and low supply of homes on the market, particularly for first-time and low-income homebuyer,” he added.
This view shows homes in Rocklin, California, on Dec. 6, 2022. (David Paul Morris / Bloomberg / Getty Images)
Many would-be buyers and sellers are waiting on the sidelines for rates to come down, and the latest Fannie Mae national housing survey released Wednesday showed a record-high 36% of respondents expect rates to come down in the next 12 months.
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But the data also found an overwhelming majority believe it is best to hold off on making a move until that happens, with only 17% saying in January it was a good time to buy a home – near a historic low.
An “Open House” sign is shown outside a home in Washington, D.C., on Nov. 19, 2023. (Nathan Howard / Bloomberg / Getty Images)
Although the housing market typically picks up leading into spring, demand actually fell last week.
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The Mortgage Bankers Association reported Wednesday that applications for a mortgage to purchase a home fell 1% compared with the previous week as high mortgage rates continued to limit housing supply; application volume remains down 19% compared with the same time last year.
FOX Business’ Megan Henney contributed to this report.
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