The 30-year fixed-rate mortgage has dropped to the lowest the U.S. has seen in five months.

Mortgage Rates Drop to 5.99%

According to Mortgage News Daily, the average rate on a 30-year fixed-rate mortgage has dipped to 5.99%.

Last week, preceding the Fed’s meeting, the average mortgage rate was reported at 6.21%.  

According to Senior Investment Strategist for Allianz Investment Management Charlie Ripley, the Fed is approaching the end of its rate hike campaign to fight inflation. 

Ripley stated that the slowing pace of current hike rates is a “clear sign” that the Fed is more assured that the U.S. economic policy is experiencing its planned effect. 

Where are mortgage rates headed?

Patient home shoppers are rewarded as mortgage rates have dramatically decreased from 2022’s peak of 7.08%. 

Sam Khater, Freddie Mac chief economist, said, “According to Freddie Mac research, this one percentage point reduction in rates can allow as many as three million more mortgage-ready consumers to qualify and afford a $400,000 loan, which is the median home price.” 

The central bank’s latest hike presents the Federal funds rate as between 4.5% and 4.75%. 

Fed Chairman Jerome Powell responded that it is “certainly possible” that the Fed benchmark will keep its benchmark interest rate beneath 5%. 

Powell stated at a news conference Wednesday, “We can now say, I think, for the first time that the disinflationary process has started. We can see that, and we see it really in goods prices so far.”

So, what does this mean for interest rates this year?

Powell said the Fed might conduct a few more rate hikes to get inflation to its target of around 2%. The current inflation rate is 6.45% down from 9.1% in June 2022.

With demand for services continuing to rise as demand for goods remains more moderate, economists believe this period of higher-than-comfortable inflation may end in the middle of 2023. 

Powell stated it may be necessary to impose a “couple of more rate hikes” to hit the Fed’s inflation target because “inflation is still running very hot.”

The Fed meets again on March 21st. 

Is it a good time to buy a home?

Today, rates are down, and over 60% of renters reported to Fannie Mae if their lease ended this month, they would buy a home. 

But is it a good time to buy?

As always, buying a home is a personal decision, and several deciding factors go into determining that. 

We can tell you that many homebuyers are being offered mortgage rates below 6%, there is the confidence that home values will not crash, and sellers are giving in to many home buyer demands.

If you have questions about the market or want a free consultation with Glass House Real Estate Principal Broker Khalil El-Ghoul, including an expert market analysis of your property’s value, don’t hesitate to contact us!




 

The Glass House Real Estate Team

The Glass House Real Estate Team

We are passionate about empowering home buyers and sellers. Our team brings a wealth of knowledge and experience. We will help you seamlessly navigate the home buying or selling process stress-free.