Mortgage rates are on the downturn, according to the Freddie Mac Primary Mortgage Market Survey (PMMS) released on Thursday.
The average 30-year fixed-rate mortgage reached 6.3 percent on April 16 — a notable decline from last week (6.37 percent) and last year (6.83 percent). The decline represents a four-week low, which Freddie Mac Chief Economist Sam Khater said was “a meaningful improvement for homebuyers during what is typically the busy spring homebuying season.”
Bright MLS Chief Economist Lisa Sturtevant said the decline was likely spurred by two ceasefires between the United States, Israel, Iran and, now, Lebanon. Traffic through the Strait of Hormuz is still precarious, with Iranian officials imposing a toll on tankers. The BBC said 15 tankers went through the Strait during the week of March 30, a dramatic decline from the average of 140 per day before the conflict. Roughly 800 ships are currently stranded in the Persian Gulf, the April 10 report said.
Lisa Sturtevant
“The ceasefire announcement earlier this month may have temporarily eased mortgage rates; however, right now, the outlook for the spring market is still unclear,” Sturtevant said in an emailed statement. “Mortgage rates are probably going to remain volatile as there is still significant uncertainty about a long-term resolution of the conflict with Iran.”
“In addition, inflation in March rose to 3.3 percent, and this higher inflation, which was tied heavily to energy and global shipping, means lower rates are unlikely in the short term,” she added.
Despite ongoing uncertainty, Refi.com Production Business Manager Kyle Bass said the “modest” move has already begun making a positive impact on homeowners and homebuyers.
Kyle Bass
“Recent Mortgage Bankers Association data shows refinance activity picking up as rates eased, which signals that homeowners are beginning to re-engage after a period of waiting on the sidelines,” he said in an email to Inman. “This isn’t a surge driven by urgency, but more of a measured return, where borrowers are reassessing their options and paying closer attention to how current rates compare to what they have today.”
The economists said agents should take these early trends with a bit of cautious optimism, with Sturtevant saying the spring market is still in limbo.
“For now, the spring housing market is still a bit of a toss-up,” she said. “New listings increased in March, signaling sellers are gearing up for the spring. However, we’re not sure if the higher inventory will be enough to entice buyers into the market. Higher rates continue to erode buyer purchasing power and uncertainty continues to give prospective buyers pause.”
“At Refi.com, we’re seeing that shift play out in real time,” Bass added. “Borrowers aren’t rushing to act, but they are becoming more aware of the opportunity. If rates continue to trend in this direction, even gradually, this kind of early re-engagement can build into more meaningful refinance activity in the weeks ahead.”
