Over the past month, mortgage interest rates have decreased, which is good news for new borrowers. For every $100,000 borrowed, the recent drop in rates will save them approximately $21 per month. As of this week, the average interest rate for 30-year fixed-rate mortgages in the United States was 6.27%. This marks a notable improvement from the 6.6% rate observed last month.
We have just experienced the largest three-week drop in mortgage rates in 14 years. The rate reduction appears to be signaling that the Federal Reserve will slow its pace of short-term interest rate hikes. That said, the reduction in rates has not yet increased the number of mortgage applications. Rather, they continue to decline.
Mortgage interest rates have risen sharply over the last 30 days. The recent change will cost new borrowers over $56 per month for every $100,000 borrowed. Average U.S. interest rates for 30-year fixed rate mortgages were at 6.02% as of this week. Last month at this time, they were sitting at 5.13%.
Mortgage rates are now falling almost as fast as they rose over the last several months (see the chart below). While that doesn’t mean the housing market will bounce right back to where it was, it should slow the rate of decline in housing transactions. We are experiencing quite the roller coaster ride. Contact me with questions.
Mortgage rates surged to their highest level since 2008 after the Fed’s rate hike. According to Freddie Mac, the 30-year fixed mortgage rate rose to 5.78% from 5.23% the previous week. In addition to increasing the amount buyers will pay to borrow for their mortgage, higher interest rates lower their purchasing power.