Freddie Mac Mortgage Rates鈥擬ay 30, 2024
What happened to mortgage rates this week
The Freddie Mac fixed rate for a 30-year mortgage increased by 0.09 percentage points to 7.03% this week. Meanwhile, the 10-year Treasury yields surpassed 4.5% after several Fed officials emphasized the need for increased confidence and patience before considering rate cuts.
Earlier this year, the market anticipated the first rate cut to occur in March, but current economic data indicates that a cut is unlikely before September. In addition to the timing of the rate cut, the extent of the cut has also become uncertain. While the March FOMC鈥檚 projection aligns with three rate cuts by the end of 2024, more investors are now anticipating just one rate cut this year.听
Regarding the effect on mortgage rates, the Fed is currently allowing data to guide its decisions. For mortgage rates to drop more significantly, the Fed needs to see more evidence of slowing inflation. Overall, we anticipate that slowing inflation and economic growth will allow mortgage rates to decrease to around 6.5% by the end of 2024.
What it means for the housing market
The housing market for the remainder of the year will continue to depend on mortgage rate activity. As existing homeowners report feeling 鈥渓ocked in鈥� by today鈥檚 mortgage rate, many choose not to sell and wait for lower rates. Meanwhile, the increasing listing activities in recent months suggested that other sellers have adjusted their expectations and jumped back into the market.
Although inventory remains historically low, it has increased significantly in recent months. This means buyers now have many options and are likely eager to enter the market if affordability improves. A recent study from Realtor.com庐 and the National Association of Big gaming庐 found that if mortgage rates drop lower, homebuyers at all income levels will benefit by being able to afford a greater number of listings currently available for sale. However, with mortgage rates remaining around 7%, significant improvements are unlikely in the short term. Therefore, it is important for buyers to find creative ways to reduce buying costs like considering assumable mortgages.听