When will we see mortgage rates at 6.00%?
A recent article from CBS News spoke to several mortgage experts to better understand when we could potentially see mortgage rates fall to 6% or lower. We’ve been below 7% for a few weeks, but some experts say we could be heading lower before the calendar flips to 2025.
Melissa Cohn, regional vice president of William Raveis Mortgage, highlighted the impact of cooling inflation on mortgage rates, “Mortgage rates move with the 10-year bond yield. Cooling inflation has helped reduce bond yields, and mortgage rates are falling again. Bond yields drop when inflation drops. Mortgage rates will drop as inflation eases and bond yields drop. More news of cooling inflation will help to bring rates down even further.”
While Logan Mohtashami, lead analyst at HousingWire, focused on the impact of inflation and the jobs market. Mohtashami stated, “The inflation growth rate has fallen a lot last year and is slowly moving toward the Fed’s 2% target. Mortgage rates have fallen recently due to the softer labor market, so the Fed will be more proactive in preventing a recession. This will be good for mortgage rates.”
Mark Worthington, a branch managed for Churchill Mortgage, stated the impact of mortgage-backed securities on mortgage rates. He said, “For rates to drop lower, investors of MBS markets need to see other indicators in the market that push them toward safer securities and investments. When this happens, investors flock to the MBS markets, which should lower the mortgage rates.”
Where is the mortgage rate lock-in gap the best & worst?
A lot of homeowners have mentioned how the feel ‘rate-locked’ in the current market. This means that they feel like they can’t upgrade from their home due to their current mortgage rate being much lower than what they could get now, but which states have the best and worst lock-in gaps?
The team at Realtor.com looked into the issue, and found that the state with the narrowest lock-in gap is Texas. Texas homeowners have an average rate of 4.3%, but that’s only about 2.55% lower than current mortgage rates.
The state with the worst lock-in gap? It’s Colorado. The average existing mortgage rate in Colorado is 3.8%. That’s the lowest in any state, and 3.45% below the current average rate available in the state.
Did mortgage rates continue to slide yesterday?
The national average rate for a 30-year, fixed-rate mortgage slid lower for the second straight day yesterday, and ended the day down 0.02% to 6.81%*. A soft mortgage rate survey from Freddie Mac and an elevated jobless claims report spurred an early rally in the bond market, and that pushed rates slightly lower,
We may continue to drift into next week until we get consumer spending data.
* National average rates accurate as of 7/18/24 from and are not advertised rates from Guaranteed Rate.
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