Mortgage Rates are Down but Market Still Slow

November 22, 2018
978 Views

Stock market volatility and global trade tensions have weighed on financial markets this week. In any other year, the news that Mortgage Rates are down would be welcomed. However, while borrowing for a home became slightly more affordable this week, it might not be the boost that the housing market needs.

Mortgage applications are falling, and many analysts see this as a precursor to a severe slowdown in the new home market.

30-Year Mortgage Rates Down by 13 Points

According to data from Freddie Mac, the average 30-year fixed mortgage rate is now at 4.81%, down by a total of 13 points. Although the change might not seem significant, It’s the largest single-week slide since 2015. Mortgages are now around the same rate that they were in early October, slowing the upwards movement caused by recent Federal Reserve rate hikes.

For those investing with a 15-year mortgage rate is 4.24%, down by 12 points over the last week.

This means that borrowing will be slightly more affordable for buyers who are closing a mortgage, but the widespread impact across the market will likely be negligible. The rate of mortgage applications for new homes is falling. Interest rates and higher home prices have contributed to the slowdown in the market.

If you’re close to the stage of buying, then this new data shouldn’t change your decision right now. If you are open to refinancing, then a slight dip in rates could be an opportunity, depending on the fixed rate when you purchased your home.

What Does This Mean for the Housing Market?

Analysts have noted that numbers could be skewed because some buyers make cash transactions rather than apply for mortgages. However, cash transactions aren’t realistic for the majority of people, so it’s also possible that many buyers are simply priced out of the market. An overpriced home market has been a concern of analysts throughout most of this year.

Data shows that growth of the home market is slowing, but so is the economy. Slowed growth isn’t the same as recession, and that’s an important distinction to make.

Investors, buyers, and sellers should follow the market closely in the coming months, as upcoming Fed rate hikes have the potential to influence interest rates yet again.

 

You may be interested

Job Hiring is Picking Up as Employers and Consumers Gain Confidence
Economy
128 views
Economy
128 views

Job Hiring is Picking Up as Employers and Consumers Gain Confidence

Lamont J - March 29, 2021

The recent government stimulus for small and medium-sized businesses, personal stimulus checks, and declining Coronavirus cases, are all great news…

Fed Could Maintain 0% Interest Rate Until 2024
Economy
119 views
Economy
119 views

Fed Could Maintain 0% Interest Rate Until 2024

Adam R - March 26, 2021

The Federal Reserve is holding its target interest rate in a range of 0.00% - 0.25%, even while the economy…

Supply Constraints Could Slow the Home Market
Economy
160 views
Economy
160 views

Supply Constraints Could Slow the Home Market

Becky H - March 25, 2021

Low inventory has been a constant in the home market for more than a year. The supply of existing and…