Where did rates go the day after The Fed?
The national average rate for a 30-year, fixed-rate mortgage ended down 0.01% to 6.97%*. Yesterday’s small dip has mortgage rates at their lowest levels since March 2024.
More helpful inflation data and a higher-than-expected jobless claims report lead the bond market to rally, and that helped mortgage rates tick lower before starting to claw back gains again in the afternoon.
Next week will provide several rounds of Fedspeak and a few other data points later in the week.
Has the drop in rates lead to more applications?
This week’s application volume report from the Mortgage Bankers Association showed week-over-week increase in mortgage applications of 16%. Also, applications to refinance a home loan increased 28% when comparing this past week to the previous week.
Mike Fratantoni, senior vice president and chief economist at the MBA, said, “Lower rates earlier in the week meant a strong increase in refinance activity, particularly for VA borrowers, who jumped on the chance to lower their rates.”
Fratantoni indicated that he saw the housing market start to loosen. When asked about current inventory levels, Fratantoni stated, “Multiple data sources are now indicating that home inventory levels, while still historically low, are up significantly from last year at this time. This is good news for many prospective homebuyers who have been frustrated by the lack of homes on the market.”
How high are current home inventory levels?
According to a recent article from Realtor.com, the week ending June 8 saw a 36% increase in available home inventory when comparing the same period last year.
Realtor.com’s senior research scientist Jiayi Xu said, “With recent mortgage rates fluctuating around 7%, potential sellers are closely monitoring these changes and adjusting their listing decisions accordingly. If the economy continues to show signs of slower growth and lower inflation, it could lead to softening rates, potentially resulting in an increase in new listings in the coming weeks.”
The region leading the charge with the most listings? The South saw a 47.2% increase in available home listings in May 2024 when compared to May 2023.
* National average rates accurate as of 6/13/24 from MortgageNewsDaily.com and are not advertised rates from Guaranteed Rate.
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