Freddie Mac released data showing that mortgage rates dropped for the fifth week in a row mid April. Homebuyers are out there taking advantage of the rates that are close to 6% and the slowdown in inflation. As of April 13, 2023 the 30-year fixed-rate mortgage was around 6.27% which is down from the week before at 6.28%. This is still not as good as the rates in April 2022 which were on average 5%.
“Incoming data suggest inflation remains well above the desired level but showing signs of deceleration. These trends, coupled with tight labor markets, are creating increased optimism among prospective homebuyers as the housing market hits its peak in the spring and summer,” says Freddie Mac’s chief economist, Sam Khater.
The economy is also seeing an ease off of inflation which also helps with mortgage rates. According to the March Consumer Price Index there is still wiggle room for what professionals concluded.
“On the one hand, the fact that inflation is still running at more than twice the target level, and core inflation – which includes goods and services, excluding volatile food and energy – saw an uptick to 5.6% in March, highlights that the Fed still has more to do and may need to lift short-term rates again at its early May meeting. On the other hand, overall inflation slowed more notably, and even core inflation on a month-to-month basis eased somewhat, a sign that the Fed’s tightening is having the desired effect. Even if the Fed needs to raise short-term rates a bit higher, we are very likely nearing the end of the tightening cycle,” explained Danielle Hale, from Realtor.com.
Those that were on the brink of buying are now jumping at the opportunity. There has been an influx in applications to purchase a home according to Bob Broeksmit, MBA President and CEO. As long as the mortgage rates hold or dip lower, the buyers will come.
“Despite the huge shifts in market momentum, home sellers can count on the usual seasonal trends tipping the scales a bit further in their favor while home shoppers should expect a fair amount of competition that should ease as we move later into the year,” Hale says.