Are We Headed for a Spring Homebuying Slowdown?

The week ending Feb. 15 saw another rise in mortgage rates, following a series of strong employment and inflation reports, with rates averaging 6.77% for a 30-year fixed-rate mortgage, according to Freddie Mac data as reported by CNN. The previous week's average rate was 6.64%. A year ago, it was 6.32%.

The latest Consumer Price Index data released on Tuesday this week showed inflation had slowed less than expected during January, Freddie Mac’s chief economist Sam Khater pointed out. As a result, mortgage rates will probably stay around the higher end of the 6% range until inflation drops to the Federal Reserve's 2% goal. But it will take a combination of lower mortgage rates and more homes on the market to motivate homebuyers and creeate a meaningful jump in home sales.

“The economy has been performing well so far this year and rates may stay higher for longer, potentially slowing the spring homebuying season,” said Khater in a statement.

Mortgage applications to buy a home so far in 2024 are down in more than half of all states compared to a year earlier, Khater said.

“Mortgage rates have been volatile due to strong employment data, rising last week and leading to a 2% drop in applications,” said Bob Broeksmit, CEO of Mortgage Bankers Association in a release.

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New-Home Sales

Financing

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