After nine straight weeks of declines, mortgage rates flattened out this week. All eyes are on economic indicators as the housing market’s typically busy spring season approaches.
The average 30-year mortgage rate this week was 6.62%,
Freddie Mac
said Thursday. The rate, which was 0.01 percentage point higher than the week prior, snaps a streak of declines that began in November. The drop came as investors became more optimistic about inflation and the prospects for Federal Reserve rate cuts.
That translated into savings for buyers: mortgage rates, one of the main determinants of the cost of buying a home, have fallen more than a percentage point from their October peak, Sam Khater, Freddie Mac’s chief economist, said in a statement. “However, since then rates have moved sideways as the market digests incoming economic data.”
Indeed, the 10-year Treasury yield, with which mortgage rates often move, is up about 0.14 percentage point since last Thursday as investors digested recent data and minutes from the Federal Open Market Committee’s December meeting.
There are more potentially important data releases coming, including government employment data on Friday and December’s Consumer Price Index reading, set for next Thursday. Stronger economic readings could send the 10-year yield higher, raising mortgage rates, while weaker reports could lower the average mortgage rate.
Freddie Mac anticipates that mortgage rates will “continue to drift downward” in 2024, Khater said, citing expectations of Federal Reserve rate cuts. ”While lower mortgage rates are welcome news, potential home buyers are still dealing with the dual challenges of low inventory and high home prices that continue to rise,” he added.
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
Read the full article here