Freddie Mac Mortgage Rates – March 21st, 2024
What Happened to Mortgage Rates This Week:
The Freddie Mac fixed rate for a 30-year mortgage moved 13 basis points higher to 6.87% this week as the market prepared for the week’s Fed meeting. The FOMC held interest rates steady in Wednesday’s meeting as recent inflation and employment readings came in higher than expected. Falling mortgage rates hinge on falling inflation, but recent data still puts inflation well above the Fed’s 2% target. In this week’s meeting, the FOMC released an update to their Summary of Economic Projections. The latest projections show that interest rates are likely to be higher for slightly longer than expected in the previous update, but the trajectory will remain dependent on incoming inflation and employment data.
The housing market continues to face elevated mortgage rates, high prices and low for-sale inventory. As the spring season and the Best Time to Sell approaches, many buyers and sellers are getting warmed up to enter the housing market. Some existing homeowners are likely to be hesitant to list their home for sale in today’s high-rate environment which will limit existing home supply. However, new home supply is looking promising as homebuilders cranked up activity in February. Housing starts climbed 5.9% year-over-year and home completions were nearly 10% higher annually in February, signaling potentially more home options in coming months. Overall, for-sale inventory has shown progress on an annual basis, but remains close to 40% below pre-pandemic levels.
Both progress in inflation and a boost in home supply would help the housing market return to more balance and affordability. Inflation moving towards 2% would allow for easing mortgage rates, and more home supply would relieve upward price pressure. When these two levers start to move in the right direction, many buyers will see a more favorable housing market.