Mortgage Rates Rises: As Investors’ expectations grow that the Federal Reserve will cut the interest rates in September, the mortgage rates went up a little today compared to last week.
On Thursday, Freddie Mac reported that the average rate on a 30-year fixed mortgage went up from 6.47% last week to 6.49%. Last year, the average rate on a 30-year fixed mortgage was 7.09%.
Furthermore, the average rate on a 15-year fixed mortgage was 5.66% an increase from 5.63% last week. Last year, the average rate on a 15-year fixed mortgage was 6.46%.
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In a statement, Freddie Mac’s head economist, Sam Khater said, “While rates increased slightly this week, they remain more than half a percent lower than the same time last year.”
He further said, “In 2023, the 30-year fixed-rate mortgage nearly hit 8 percent, slamming the brakes on the housing market. Now, the 30-year fixed-rate hovers around 6.5 percent and will likely trend down in the coming months as inflation continues to slow. Lower rates are good news for potential buyers and sellers alike.”
Investors and bond traders expect that the Federal Reserve will cut the interest rate in September which led to a decline in mortgage rates in the past few weeks.
As Buyers expect how large will the rate be cut by the Fed, the interest rate could drop even more before the next policy meeting.
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The market is still active because of the recent decline in rates despite the mortgage rate went up on Thursday.
As per the Mortgage Bankers Association (MBA) reports on Wednesday, the application for home buying went up by 3% compared to the previous week.
Moreover, the borrower is taking the opportunity to restructure their loans.
MBA further reported that the request for refinance a home loan rose by 35% compared to the previous week and against the same week last year, it went by 118%.
However, interest rates are not the only issue, the house prices and less number of houses for sale make the houses expensive. According to the National Association of Realtors (NAR) affordability indicator, buyers were facing a lot of difficulties in the second quarter because of high mortgage rates.
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