Falling mortgage rates attract some buyers
The average daily mortgage rate topped 7% a week ago last Wednesday, hitting a four-month high. However, the banking crisis in the United States has contributed to lower interest on home loans. The daily average for 30-year fixed-rate mortgages ended this week at 6.55%, half a point below its March 8 peak.
“Buyers jumped when rates fell because they’re so volatile right now, which shows that there are a lot of people waiting in the wings for the right time to enter the market,” said Chen Zhao, head of economic research at Redfin. “Where mortgage rates go from here largely depends on the Fed’s reaction to the chaos in the banking sector in the United States and abroad, alongside stubbornly high inflation.”
Although lower rates make it cheaper to buy a home and prices go down, the average mortgage payment is still nearly a quarter higher than it was a year ago. And although buyers are rushing to get a lower rate, overall demand in the market remains weak. Pending home sales are down 17% from 12 months ago, the biggest drop in six weeks.