Long-term mortgage rates lower for 3rd straight week
A recent article from ABC News looked into the long-term trend for mortgage rates. According to their data, rates have lowered for three straight weeks, and dipped just below 7%*.
This news comes as a bit of relief to homebuyers as the market saw five straight weeks of increases that occurred before the recent pullback.
Mortgage Bankers Association CEO Bob Broeksmit stated, “May has been a better month for the mortgage market, with the last three weeks showing declining mortgage rates and increasing applications. Rates below 7% are good news for prospective buyers, and MBA expects them to continue to inch lower this summer.”
The recent pullback in mortgage rates lead to an increase in home loan applications. The MBA stated that applications were up 1.9% over the previous week.
Where is the average down payment at?
Realtor.com looked into the national average for a down payment on a home. According to their data, down payment levels are still elevated from pre-pandemic levels, but down from their peak in Q4 2023.
The average down payment for a home in the first quarter of 2024 was about $26,400. That’s 13.1% lower than the $30,400 mark set late last year.
While down payments are elevated, it’s clear that they’re off their peak. The average down payment may dip further in the fall and winter months when home prices have historically cooled off.
At what price are homebuyers buying homes?
In April 2024, 17% of homes sold were priced lower than $300,000 according to a recent article from Newsweek. That’s up from 14% last year.
What’s interesting is that the share of homes sold in the $300,000 to $399,999 price range actually dipped from 32% in April 2023 to 27% in April 2024.
The change in pricing indicates that value conscious buyers are looking at the bottom end of the market to find their next (or their first) home.
When asked about the prices homebuyers are looking to get, Danielle Hale, Realtor.com’s chief economist, said, “We are seeing a growing share of homes that were sold in that under $300,000 category which is the lowest price category that they offer. That does suggest sales are picking up in more affordable price points. Those are probably smaller homes.”
* National average rates accurate as of 5/23/24 from ABC News and are not advertised rates from Guaranteed Rate.
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