Freddie Mac Mortgage Rates—June 6, 2024
What happened to mortgage rates this week
The Freddie Mac fixed rate for a 30-year mortgage decreased by .04 percentage points to 6.99% this week. Meanwhile, the 10-year Treasury yield now sits at about 4.3%, which is down a full 30 basis points from last week’s high of 4.6%. While homebuyers are certainly welcoming the marginal drop in rates, they remain near two-decade highs and continue to present challenges to both buyers and sellers alike.
What it means for the housing market
Though rates are higher than forecasted, it is important to note this is because the Fed is currently relying on data-driven decision making. For mortgage rates to drop more, the Fed needs to see more evidence of slowing inflation vis-a-vis lower CPI readings and moderating employment growth. Overall, we anticipate inflation will continue to slow and will allow mortgage rates to decrease to around 6.5% by the end of 2024/early 2025.
As the final weeks of the spring buying season wane, we can all but be assured that this year’s peak season will be a letdown compared with beginning-of-the-year forecasts.
Pending home sales slowed last week to a four-year low, and inventory levels continue to rise by about 30% year over year. This means buyers are sitting in a bittersweet market right now: They have the most options since before the pandemic, but are stymied because of rising prices and stubbornly high mortgage rates.
Given such conditions, we anticipate the rest of the year to bring a lukewarm housing market with the hopes that falling mortgage rates and rising inventory entice seasonally unorthodox buyers back into the market.