The 30-year-fixed-rate mortgage changed little this week, averaging 6.66%, a slight increase from last week’s average of 6.62%, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac.
This week’s numbers:
- The 30-year FRM averaged 6.66 percent as of January 11, 2024, up from last week when it averaged 6.62 percent. A year ago at this time, the 30-year FRM averaged 6.33 percent.
- The 15-year FRM averaged 5.87 percent, down from last week when it averaged 5.89 percent. A year ago at this time, the 15-year FRM averaged 5.52 percent.
What the experts are saying:
“Mortgage rates have not moved materially over the last three weeks and remain in the mid-six percent range, which has marginally increased homebuyer demand,” said Sam Khater, Freddie Mac’s chief economist. “Even this slight uptick in demand, combined with inventory that remains tight, continues to cause prices to rise faster than incomes, meaning affordability remains a major headwind for buyers. Potential homebuyers should look closely at existing state and local resources, such as down payment assistance programs, which can considerably help defray closing costs.”
Realtor.com Economist Jiayi Xu commented:
“The Freddie Mac fixed rate for a 30-year loan ticked up by 0.04 percentage points to 6.66% this week as the 10-year yield was back above 4%. The latest CPI data underscored that improvement may not be seen every month. Coupled with the resilience in the labor market, reflected in December’s 3.7% unemployment rate, it suggests that rate reduction may not happen as soon as current market expectations indicate.
“Mortgage rates fell each week in December, dipping below 7% before the start of the new year. However, the path forward may see fluctuations as we observed in the beginning of the new year, considering the uneven improvement in inflation. Nevertheless, as long as the economy continues to see progress on inflation, the general expectation is for mortgage rates to continue their downward trajectory.
“Looking ahead, as long as inflation moves toward the 2% target level, we expect the overall downward trend will generate some positive impact on home-selling sentiment, fostering an anticipation of increased new listings in the market. Nevertheless, considering that the pace of decline for mortgage rates is likely to be slower compared to the end of 2023 given the expected volatility ahead, there is a potential for a slower-than-expected growth in listing activities. Considering two-thirds of outstanding mortgages presently carry rates below 4%, a significant portion of individuals might choose to delay selling plans, waiting for the potential for even lower rates to purchase their next residences,” Xu concluded.
