The 30-year fixed-rate mortgage (FRM) averaged 6.69%, down from 6.71% the previous week, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac released Thursday. This is the second week in a row of declines.
This week’s numbers:
- 30-year fixed-rate mortgage averaged 6.69% as of June 15, 2023, down from last week when it averaged 6.71%. A year ago at this time, the 30-year FRM averaged 5.78%.
- 15-year fixed-rate mortgage averaged 6.10%, up from last week when it averaged 6.07%. A year ago at this time, the 15-year FRM averaged 4.81%.
What the experts are saying:
“Mortgage rates decreased slightly this week in anticipation of the pause in rate hikes by the Federal Reserve,” said Sam Khater, Freddie Mac’s Chief Economist. “As inflation continues to decelerate, economic growth is slowing and the tightening cycle of monetary policy is reaching its apex, which means mortgage rates are expected to decrease later this year and into next.”
Realtor.com economic data analyst, Hannah Jones, commented:
“The Freddie Mac fixed rate for a 30-year mortgage fell slightly this week, dropping 2 basis points to 6.69% as markets absorbed the latest inflation data and the week’s FOMC meeting. Tuesday’s Consumer Price Index data showed that headline inflation cooled to 4.0% in May, down from 4.9% in April, suggesting Fed policy and tighter lending standards are cooling price growth. Gradually slowing inflation gave the Fed committee confidence that the rate increases made to-date are having the intended effect. As a result, the Fed chose to pause interest rate hikes in this week’s meeting. Though we have likely not yet seen the full impact of the Fed’s ten consecutive rate hikes, totaling a 5 percentage point increase in the policy rate since March 2022, this action marked an important step in the Fed’s contractionary policy.
“Though slowing inflation signifies better economic conditions ahead, borrowing, including for a home purchase, is likely to remain expensive for the remainder of the year. Incoming economic data will reveal whether enough has been done to bring inflation back down to the 2% target. The interest rate hikes to-date are likely to take some time to move through the economy and the Fed will adjust policy as they see fit in upcoming meetings. Importantly, June’s updated Summary of Economic Projections suggested that more hikes are possible by the end of the year as the median end-of-year federal funds rate expectation increased half a point from March’s expectation.
“Both housing supply and demand remain stifled by affordability constraints. Mortgage rates have been on the high end of the 6-7% range since the beginning of June and home prices have made their typical seasonal ascent, though less aggressively than in summers past. More than three-quarters of surveyed home shoppers expect to be priced out of the market if home prices and rates keep rising. However, prices are not expected to hit a new peak this summer as has been the trend in years past. The national median listing price fell year-over-year for the first time in the data’s history last week as sellers adjusted their asking prices to attract buyer demand. Despite this annual price decline, homes in many areas are out of the feasible price range for many buyers and still-high interest rates are discouraging homeowners from giving up their current mortgage rate and listing their homes for sale. Though housing demand has softened nationally, many local markets, especially in affordable areas, continue to attract significant attention from home shoppers.”
