The 30-year fixed-rate mortgage (FRM) decreased slightly this week, from last week’s average of 6.66% to an average of 6.6% this week, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac released Thursday.
This week’s numbers:
- The 30-year FRM averaged 6.60%, down from last week when it averaged 6.66%. A year ago at this time, the 30-year FRM averaged 6.15 percent.
- The 15-year FRM averaged 5.76%, down from last week when it averaged 5.87%. A year ago at this time, the 15-year FRM averaged 5.28%.
The takeaways:
“Mortgage rates decreased this week, reaching their lowest level since May of 2023,” said Sam Khater, Freddie Mac’s chief economist. “This is an encouraging development for the housing market and in particular first-time homebuyers who are sensitive to changes in housing affordability. However, as purchase demand continues to thaw, it will put more pressure on already depleted inventory for sale.”
Realtor.com Economist Jiayi Xu commented:
“The Freddie Mac fixed rate for a 30-year loan went down 0.06 percentage points to 6.6% this week as investors digested recent economic indicators. However, the still-elevated December inflation coupled with stronger-than-expected retail sales indicated that the Federal Reserve may keep its current restrictive policy longer-than-expected instead of initiating interest rate cuts in March as the market previously expected. Looking forward, more volatility in mortgage rates is possible as the economy experiences uneven improvement.
“The recent fluctuations in mortgage rates pose a significant challenge for homebuyers striving to establish their purchasing budgets. This challenge is particularly pronounced for first-time home buyers, who typically have a lower share of down payments, and a slight increase in mortgage rates could push them further away from realizing their dream of homeownership.
“On one hand, homebuyers should carefully consider how these swings in mortgage rates might impact their financial bottom line. This precaution is crucial to prevent overextension and ensure financial stability. Additionally, buyers with more flexibility can explore expanding searches outside of specific locations to widen their range of housing options. Specifically, Realtor.com’s 2024 Best Markets for First-Time Homebuyers provided a list of cities characterized by a combination of more affordable homes, more active listings, abundant job opportunities, shorter commute times, and vibrant lifestyle offerings.”
