Mortgage rates pulled back this week, with the average 30-year fixed rate retreating to 7.08%. Interest rates on most fixed-rate mortgage products, including FHA loans and VA loans, decreased or stayed about the same. Meanwhile, adjustable mortgage rates inched slightly higher.
Here are the current mortgage rates, without discount points unless otherwise noted, as of June 22:
— 30-year fixed: 7.08% (down from 7.14% a week ago).
— 20-year fixed: 7.08% (up from 7.07% a week ago).
— 15-year fixed: 6.52% (down from 6.54% a week ago).
— 10-year fixed: 6.61% (down from 6.65% a week ago).
— 5/1 ARM: 6.12% (up from 6.08% a week ago).
— 7/1 ARM: 6.22% (up from 6.21% a week ago).
— 10/1 ARM: 6.45% (up from 6.43% a week ago).
— 30-year jumbo loans: 7.15% (down from 7.22% a week ago).
— 30-year FHA loans: 6.19% with 0.05 point (down from 6.32% a week ago).
— VA purchase loans: 6.48% with 0.04 point (down from 6.6% a week ago).
“Mortgage rates slid down again this week but remain elevated compared to this time last year. Potential homebuyers have been watching rates closely and are waiting to come off the sidelines. However, inventory challenges persist as the number of existing homes for sale remains very low. Though, a recent rebound in single-family housing starts is an encouraging development that will hopefully extend through the summer.”
— Sam Khater, Freddie Mac’s chief economist, in a June 22 statement
Those who have been waiting for mortgage rates to fall before buying a home are in good company. A recent U.S. News survey
found that two-thirds of this year’s homebuyers are holding out for lower rates, but they haven’t had much luck so far. Mortgage rates are actually slightly higher today than they were when we conducted this survey in March.
To make matters worse, home prices have also increased by about 5.5% in the months since our survey ran. The median sales price for existing homes sold in May was $396,100, up from $375,400 in March, according to the National Association of Realtors. Buyers who are waiting for better financial conditions are now faced with both higher mortgage rates and higher home prices.
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Mortgage rates had previously been expected to fall in the second half of the year, but recent economic developments have many forecasters revising their expectations. Federal Reserve Chair Jerome Powell confirmed in testimony to Congress that “nearly all” Fed policymakers say it may be necessary to raise rates again in 2023.
“With the potential for additional rate hikes ahead, mortgage rates will remain elevated throughout the remainder of the year,” says Realtor.com economist Jiayi Xu. “As a result, affordability will continue to be an important factor in buyers’ home purchasing decisions.”
If good things come to those who wait, let’s hope that today’s homebuyers haven’t run out of patience just yet.
[Compare: Compare Mortgage Rates]
Indicator of the Week: A Bleaker Mortgage Rate Forecast
Newly revised mortgage market forecasts suggest that some economists were overly optimistic when predicting rate trends at the beginning of the year. Two of the outlooks that we follow — the Mortgage Bankers Association’s and Wells Fargo’s — say that mortgage rates will stay higher for longer than previously anticipated.
MBA predicted in its previous forecast that the 30-year fixed mortgage rate would fall to 5.3% by the fourth quarter of 2023, but it revised the year-end rate to 5.8% in the most recent release. Wells Fargo’s initial economic outlook put the fourth-quarter rate at 5.4%, but its current forecast expects that rates won’t drop below 6% until the second quarter of 2024. Put simply, homebuyers will have to wait even longer to come off the sidelines if they’re holding out for lower mortgage rates. For those who have simply run out of patience, it may be possible to shop for a lower mortgage rate, buy discount points to lower your rate or even opt for an adjustable-rate mortgage that has a lower initial rate. Just be sure to talk through your options with a trusted mortgage professional.
More from U.S. News
Mortgage Rates Rise, Pushing Housing Payments to New Heights
Spring Mortgage Forecast: Rates Will Stay Above 6%
Two-Thirds of Homebuyers Are Holding Out for Lower Rates
Mortgage Rates Decline ? But Economists Revise Long-Term Forecasts originally appeared on usnews.com
