Fifth consecutive week of falling mortgage rates
Mortgage rates continue to drop for the fifth week in a row as inflation shows signs of deceleration and the housing market hits its peak in spring and summer.
- In the week ending April 13, the 30-year fixed-rate mortgage averaged 6.27%, down slightly from 6.28% the week before.
- Freddie Mac’s chief economist, Sam Khater, attributes the decreased rates to inflation remaining above the desired level but showing signs of deceleration, along with tight labor markets that are creating increased optimism among prospective homebuyers.
- The average mortgage rate is based on mortgage applications received from thousands of lenders across the country, and the survey includes only borrowers who put 20% down and have excellent credit.
- The economy continues to give mixed signals, but as long as inflation continues to cool down, it is good for mortgage rates.
- This week’s inflation data, based on the March Consumer Price Index, was subject to interpretation, according to Danielle Hale, Realtor.com chief economist. Hale notes that although inflation is still running at more than twice the target level, overall inflation slowed more notably, and even core inflation on a month-to-month basis eased somewhat, indicating that the Fed’s tightening is having the desired effect.
- The Fed's actions influence the interest rates borrowers pay on mortgages, and mortgage rates tend to track the yield on 10-year US Treasury bonds.
- Mortgage applications were up last week from the week before, according to the Mortgage Bankers Association.
- The falling rates have brought in some buyers, and as long as they can be sustained, buyers will continue to be on the hunt, possibly pulling more homeowners into the market as sellers.