The 30-year fixed-rate mortgage (FRM) averaged 6.35%, this week, down just a hair from 6.39% last week, according to the latest Primary Mortgage Market Survey (PMMS) from Freddie Mac released Thursday.
This week’s numbers:
- 30-year fixed-rate mortgage averaged 6.35% as of May 11, 2023, down from last week when it averaged 6.39%. A year ago at this time, the 30-year FRM averaged 5.30%.
- 15-year fixed-rate mortgage averaged 5.75%, down slightly from last week when it averaged 5.76%. A year ago at this time, the 15-year FRM averaged 4.48%.
What the experts are saying:
“This week’s decrease continues a recent sideways trend in mortgage rates, which is a welcome departure from the record increases of last year,” said Sam Khater, Freddie Mac’s chief economist. “While inflation remains elevated, its rate of growth has moderated and is expected to decelerate over the remainder of 2023. This should bode well for the trajectory of mortgage rates over the long-term.”
Realtor.com economist, Jiayi Xu, commented:
“The Freddie Mac fixed rate for a 30-year mortgage rate continued to move lower this week to 6.35% as 10-yr treasury yields trended down. In light of a strong jobs report last week, April’s CPI data reinforced that we are very likely at the end of the tightening cycle. In April 2023, the headline CPI climbed by 4.9% year-over-year, slowing for the 10th consecutive month and hitting its lowest level in two years. The core inflation–which includes goods and services excluding volatile food and energy–was at 5.5%. On a monthly basis, both the headline and core indexes increased 0.4%, in line with forecasts from economists.
“While the U.S. economy is moving in the right direction, the pace of improvement is likely slower than desired by the Federal Reserve, and inflation still remains significantly above the target of 2%. In addition, although the labor market figures are promising amidst concerns of a recession, it also gives the Fed little reason to cut rates in the short term. In June, the Fed will release its updated economic projections, and we will have a clearer picture at that time after more data is available.
“As long as the economy continues to see progress on inflation, it is expected that mortgage rates will remain toward the lower end of the 6-7% range. Meanwhile, the housing market continues to face challenges as home sellers are less active this spring. In addition to the “locked-in effect” of mortgage rates, sellers are facing another issue caused by high inflation: the increasing costs of home improvements prior to selling. A recent survey from Realtor.com shows that improving homes before selling is one of the top concerns among sellers. In April 2023, the household furnishing and supplies index increased 4.8% over the prior year, a welcomed improvement compared to the preceding two months, during which the growth in household furnishing exceeded the overall inflation rate. However, certain items, such as floor covering, still experienced a faster price growth of 9.9% higher than a year ago. While this issue primarily affects sellers, buyers may also suffer the consequences, as the high cost of home repairs are likely to be passed on to them in the end.”
