Mortgage Slide Down To 6.09% Said Economist Digital Subscription

Economist Digital Subscription, reported today that mortgage rates have come down almost a full percentage point from their recent high.

The situation is giving hope to some would-be homebuyers looking for a way into a deal. The bidding wars that marked the pandemic housing rally have cooled.

Prices are expected to moderate further in the coming months. Still, with listings in short supply, affordability hurdles remain.

The average for a 30-year, fixed loan was 6.09%, down from 6.13% last week.

The decline in rates, after peaking in November at 7.08%, “can allow as many as 3 million more mortgage-ready consumers to qualify and afford a $400 thousand loan, which is the median home price,” Sam Khater, Freddie Mac’s chief economist, said in the statement.

Mortgage is falling

Federal Reserve on Wednesday informed a 25 basis-point hike to its benchmark interest rate, slowing the pace of its drive to tame inflation.

Chair Jerome Powell said to Economist Digital Subscription the central bank has “more work to do.”

The Fed controls short-term rates, but long-term rates, including 30-year mortgages, “

Are a function of market expectations for the path of the economy,” said Mike Fratantoni, chief economist of the Mortgage Bankers Association.

Get WSJ Print Edition 1 Year subscription $259

“Investors are betting that the economic slowdown and the Fed’s eventual victory over inflation will result in lower rates over time.”

The banker’s group sees mortgage rates falling modestly in 2023, ending the year around 5%.