Last week, mortgage interest rates fell for the first time in more than a month, with the 30-year fixed mortgage rate coming to 7.09%.
Rebecca Chen of Yahoo Finance reports:
Recent rate fluctuations — including this week’s drop of 7.22% and a steady rise last month — have prompted some financial institutions to revise their mortgage forecasts for the rest of 2024.
Sam Khater said: “An environment in which interest rates continue to rise above 7% is impacting both sellers and buyers. Many potential sellers are still hesitant to list their homes and are foregoing lower mortgage rates than previous years, which negatively impacts supply and keeps House prices are high. Freddie Mac Chief Economist. “These higher home prices add to the overall affordability challenges that potential buyers face in this high-priced environment.”
Strong economic data and stubborn inflation have prompted housing experts to change their forecasts for where prices will be at the end of 2024.
Fannie Mae, the government-backed mortgage lender, raised its year-end forecast to 6.4% from 5.9% earlier this year.
“Our expectations include the Fed cutting rates by 25 basis points twice in the fall,” Douglas Duncan, chief economist at Fannie Mae, told Yahoo Finance.
The Federal Reserve kept the federal funds rate steady last week. Meanwhile, mortgage interest rates – influenced by the Fed’s index – have risen above 7% over the past three weeks.
To reach or near the revised forecast, Duncan said the core personal consumption expenditures index — the Fed’s preferred measure of inflation — would need to fall toward 2% for at least three consecutive months. The latest core personal consumption expenditures index rose 2.8% in March year-over-year.
The National Association of Realtors (NAR) now expects average prices to stabilize at 6.5% by the end of the yearmodified from 6.3% expected at the beginning of the year.
“The Fed has delayed interest rate cuts,” said Lawrence Yun, chief economist at NAR. “I would have thought that by now, interest rates would be lower and rate cuts would start. Whatever rate cut the Fed won’t do this year will simply be postponed to 2025. They’re calling for a rate cut in September, but we’ll see. “
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