Freddie Mac Mortgage Rates—March 28, 2024
What happened to mortgage rates this week
The Freddie Mac fixed rate for a 30-year mortgage fell slightly this week, dropping 8 basis points to 6.79%, but continued to be close to 7%, remaining within the range of 6.6% to 7% since last December. While the Federal Reserve Bank doesn’t directly set mortgage rates, the prevailing high policy rate environment has resulted in increased borrowing costs across various sectors, including mortgages. In order to see more significant declines of mortgage rates, the Fed will need to see more evidence that inflation is slowing on a sustainable trajectory. Nonetheless, recent data indicates that the economy has remained remarkably resilient despite a 525 basis point tightening. Looking ahead, with the unemployment rate rising to 3.9% in February 2024 for the first time in two years, it will be interesting to see if this trend persists in the forthcoming March jobs report, scheduled for release next Friday.
What it Means for the Housing Market:
With mortgage rates holding steady at high levels, homebuyers, especially first-time homebuyers without near-record high home equity to leverage on could feel frustrated. In fact, according to Realtor.com’s rental report, the combination of elevated mortgage rates, escalating home prices, and decreasing rental expenses has made buying a starter home a less affordable option than renting in all major markets. Nonetheless, for those committed to buying a home this spring, there’s a glimmer of hope: the availability of fresh and affordable listings has increased compared to last year. This means that prospective buyers have a wider array of homes to consider, increasing the likelihood of finding their ideal match. Moreover, the uptick in listings could also exert downward pressure on prices, offering some reliefs to homebuyers.