Mortgage rates ticked a tad lower this week, but the slight decline provides little-to-no consolation for potential home buyers and sellers as demand remains largely stalled.
Freddie Mac's latest Primary Mortgage Market Survey released Thursday showed that the average rate for the benchmark 30-year fixed mortgage decreased to 6.63% this week, a decline from 6.69% last week but still up significantly from 6.09% a year ago.
The rate on the 15-year fixed mortgage edged lower, too, averaging 5.94% after coming in last week at 5.96%. One year ago, the rate on the 15-year fixed note averaged 5.14%.
EXISTING HOME SALES TUMBLED TO LOWEST LEVEL SINCE 1995 LAST YEAR
Mortgage rates for the 30-year note have been hovering around that mid-6% range for the past few months, and while there have been occasional signs of renewed demand, housing market activity has slowed to a sputter.
The Mortgage Bankers Association (MBA) reported Wednesday that purchase applications fell last week, attributing the decline to ongoing low inventory that continues to drive up home prices amid a worsening affordability crisis.
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Data from Realtor.com indicates that the roughly 1% drop in rates since October sparked increases in pending home sales and new home sales, and there has also been an increase in listings. But volume is still down roughly 18% from a year ago as high prices and elevated rates are still keeping many buyers and sellers on the sidelines.
"Despite the promising increase in listing activity, inventory is likely to remain low as sellers may not respond as swiftly as anticipated," Realtor.com economist Jiayi Xu said in a statement.
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"In other words, a more substantial improvement in mortgage rates is necessary to attract more sellers to the market," Xu continued. "If for-sale inventory fails to meet the demand from buyers, there is a possibility that prices may start to climb once again, contributing to the persistence of higher home prices."
