Mortgage Rates Hold Steady at 7% as Mortgage Applications Increase

Mortgage rates remain stable at around 7% this week, with a slight increase in the 30-year fixed-rate mortgage. However, there is good news as mortgage applications have seen an uptick after a six-week decline, indicating a positive sign for the upcoming spring buying season.

Steady Mortgage Rates at 7% Signal Stability in the Market

Mortgage rates have remained steady around 7% this week, indicating stability in the market. This is according to data from Curinos analyzed by MarketWatch Guides. The 30-year fixed-rate mortgage currently stands at 7.30%, which is a slight increase of +0.05 percentage points compared to the previous week.

Mortgage Rates Hold Steady at 7% as Mortgage Applications Increase - 2080838448

( Credit to: Marketwatch )

Despite the slight increase, there is positive news as mortgage applications have seen an uptick after six weeks of decline. Freddie Mac’s data released on Thursday showed an increase in mortgage applications, suggesting that first-time homebuyers are returning to the market. This is an encouraging sign for the upcoming spring buying season.

Former Federal Reserve Official Predicts Potential Rate Cut

Former Federal Reserve official James Bullard has made a statement indicating the possibility of another rate cut in the near future. This prediction comes after the recent announcement in the job report that the unemployment rate has slightly risen. The Federal Reserve board will be meeting again next week to discuss further actions.

Current Average Mortgage Rates

Here are the current average mortgage rates:

  • 30-year fixed mortgage rate: 7.30%
  • 15-year fixed mortgage rate: 6.63%
  • 5/6 ARM mortgage rate: 7.01%
  • Jumbo mortgage rate: 7.14%

The average monthly payment for a 30-year fixed-rate mortgage at the current rate of 7.30% would be $685.57 per $100,000 borrowed. This is slightly higher compared to last week’s average rate of 7.25%.

For a 15-year fixed-rate mortgage at 6.63%, the monthly payment would be approximately $878.27 per $100,000 borrowed. This rate has remained unchanged from last week.

The average rate for a 5/6 adjustable-rate mortgage (ARM) is now 7.01%, an increase of +0.03 percentage points over the past week. With a 5/6 ARM, the rate is fixed for the first 5 years and then adjusts every six months over the next 25 years. The monthly payment for this type of mortgage at the current rate would be around $665.97 per $100,000 borrowed over the first 5 years.

Jumbo loan interest rates have also increased slightly by +0.06 percentage points. The average jumbo mortgage rate is now 7.14%. Jumbo loans are mortgages that exceed the loan limits set by the Federal Housing Finance Agency (FHFA) and funding criteria of Freddie Mac and Fannie Mae.

Factors Influencing Mortgage Rates

It is important to note that mortgage rates are influenced by various factors, including the economic environment, inflation, the federal funds rate, and housing market conditions. However, specific factors related to the borrower, such as their financial situation, loan amount and structure, location, and whether they are first-time homebuyers, can also affect the mortgage interest rate.

To find the best mortgage rate, it is recommended to check credit scores and credit reports, understand the different mortgage options available, compare quotes from multiple lenders, review loan estimates to understand the full breakdown of costs, and consider negotiating with lenders on rates.

Forecasts Point to Declining Mortgage Rates

Looking ahead, experts forecast that mortgage rates will continue to decline. Fannie Mae economists expect rates to drop below 6% by the fourth quarter of 2024, while the Mortgage Bankers Association (MBA) forecasts rates of 6.1% for the same period. These projections provide hope for potential homebuyers and homeowners looking to refinance.

It is important to note that before making significant financial decisions, it is advisable to seek guidance from trusted professionals such as financial advisers or credit counselors. Each person’s financial situation is unique, and personalized advice can help individuals make informed choices.

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