Falling Mortgage Rates Into The 6’s

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Falling Mortgage Rates Into The 6’s

Jul 20, 2023 | News | 0 comments

Farther and further have distinct uses. While one pertains to distance, the other conveys the notion of “additional” or “additionally.” Despite potential discrepancies in dictionary definitions, confusion has arisen due to the widespread misuse of “further” over time. Let us refrain from discussing this matter any further.

What a remarkable shift in mortgage rates within a mere four days! The average lender’s rates were nearly as high as the peak witnessed in 2022, hovering around the “mid 7’s.” However, today, we observe a noticeable change as top-tier conventional 30-year fixed scenarios are now embracing mid-to-upper 6’s rates once again, which seems to be the latest trend.

Interestingly, Freddie Mac’s widely cited weekly rate survey also shows rates in the high 6’s. However, it mistakenly indicates a substantial week-over-week increase, which is actually not the case. The discrepancy arises from the fact that Freddie Mac’s averages are based on five days of rates leading up to Thursday, while our index provides daily updates, accurately reflecting the current day’s rates.

As per Freddie Mac’s report, mortgage rates have risen to their highest point since November 2022, which was the last time rates exceeded seven percent. Despite recent data indicating a softening of inflation, with the lowest annual rate in over two years, housing costs continue to remain persistently high. This is primarily attributed to the limited housing inventory in comparison to the strong demand for housing, which accounts for a significant portion of overall inflation.

Put differently, Freddie Mac is still catching up with the spike in rates from last week, but we are here to inform you that those rate increases have already been reversed. Whether mortgage rates continue to decline further will hinge on whether there is additional evidence of reduced inflation pressures, as observed in the economic data for this week.