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Mortgage rates haven’t experienced dramatic swings in weeks, giving prospective home buyers time to plan their budget with more certainty. And the Federal Reserve’s actions this week could help bring rates lower, economists say.
The Fed voted Wednesday to keep its benchmark interest rate unchanged. But its additional announcement to scale back “quantitative tightening”—whereby slowly reducing the government bonds it holds in its portfolio—could have a greater impact on mortgage rates.
“That could help lower Treasury yields,” which tend to have more influence on borrowing costs, NAR Chief Economist Lawrence Yun said Thursday during a press conference announcing the association’s latest existing-home sales report. He added that lower rates could arrive “in the upcoming months.”
The 30-year fixed-rate mortgage has stayed under 7% for nine consecutive weeks, delivering fewer jolts to the market and putting consumers at ease, says Freddie Mac Chief Economist Sam Khater.
Despite more stable borrowing costs, mortgage applications for a home purchase—a gauge of future homebuying activity—was essentially flat in the latest week, the Mortgage Bankers Association reports. While home buyers are reemerging in the housing market, some may be sidelined due to affordability concerns: Last month, home prices hit the highest levels ever recorded for the month of February, according to NAR’s latest housing data.
“The market needs lower mortgage rates to help lift home sales higher,” Yun says.
Here’s a closer look at the national averages in mortgage rates for the week ending March 20:
- 30-year fixed-rate mortgages: averaged 6.67%, rising slightly from last week’s 6.65% average. A year ago, 30-year rates averaged 6.87%.
- 15-year fixed-rate mortgages: averaged 5.83%, also rising slightly from last week’s 5.8% average. Last year at this time, 15-year rates averaged 6.21%.
