On the heels of the Fed standing firm on keeping its benchmark rate unchanged, mortgage rates trickled down again this week, with the 30-year-fixed rate mortgage averaging 6.95%, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac released Thursday. The move marks another step down after dropping to 6.99% the previous week.
This week’s numbers:
- The 30-year FRM averaged 6.95% as of June 13, 2024, down from last week when it averaged 6.99%. A year ago at this time, the 30-year FRM averaged 6.69%.
- The 15-year FRM averaged 6.17%, down from last week when it averaged 6.29%. A year ago at this time, the 15-year FRM averaged 6.10%.
What the experts are saying:
“Mortgage rates continued to fall back this week as incoming data suggests the economy is cooling to a more sustainable level of growth,” said Sam Khater, Freddie Mac’s chief economist. “Top-line inflation numbers were flat but shelter inflation, which measures rent and homeownership costs, increased, showing that housing affordability continues to be an ongoing impediment for buyers on the house hunt.”
Realtor.com Senior Economist, Ralph McLaughlin commented, “Despite the drop this week, mortgage rate trends aren’t likely to bust the mortgage rate inventory lock-in effect until at least the end of the year, and possibly well into 2025, as the Fed holds fast on fighting inflation.
“We’ll likely need to see a 150-200 (basis points) drop in the 10-year yield to get to a point where sellers feel comfortable selling and buying another home, and at current spreads, this could require 3-4 quarter-point rate cuts by the Fed. As of now, the market is pricing in just one cut by the end of the year and 2-3 cuts in 2025. As such, anyone hoping the lock-in effect will be busted this year may be sorely disappointed.”
