Mortgage interest rates in the United States have seen a decline in recent weeks, marking the sixth consecutive week of decrease. The average 30-year fixed-rate mortgage fell to 7.03% from 7.22% the previous week, reaching its lowest level since August. This drop in rates is attributed to the decline in the 10-year Treasury yield.
Despite the recent decline, the rates are still higher than they were a year ago. High interest rates and house prices, along with limited inventory, have dampened homebuying demand. However, the lower rates have spurred an increase in mortgage applications, which have increased for the fifth straight week, indicating rising borrower demand.
In addition to the increase in mortgage applications, refinancing activity has also seen a surge, jumping nearly 14%, the highest since February. Factors such as down payment, credit score, and debt-to-income ratio can affect the interest rate offered by lenders. Therefore, shopping around and comparing multiple lenders is recommended to find the best mortgage rate.
Looking ahead, experts predict that changing economic conditions could help stabilize mortgage rates in 2024. Real estate brokerage Redfin predicts a 1% decrease in home prices in the second and third quarters of 2024, marking the first decline since 2012. The brokerage also anticipates a drop in mortgage rates, with the 30-year fixed-rate mortgage falling to 6.6% by the end of 2024. These changes are attributed to potential political and legal developments in 2024, including increased awareness of real estate agent commissions and potential housing policy proposals from the Biden administration.
