Mortgage rates are moving. As homeowners and prospective buyers kept a close eye on the market, mortgage rates experienced a slight decline ahead of a crucial inflation report. The average 30-year fixed mortgage rate fell to 7.08% from 7.17% last week, marking a momentary pause in the steady climb of borrowing costs. Meanwhile, the 15-year fixed rate also saw a slight decrease, dropping from 6.5% to 6.46%.
This respite in rising mortgage rates comes as the housing market anticipates Tuesday’s inflation data, which could potentially shift the current trend. The U.S. Bureau of Labor Statistics reported a 3.2% increase in consumer prices from the previous year, stirring speculations about the Federal Reserve’s next moves. Despite the drop in rates, experts like HousingWire’s Logan Mohtashami suggest that any long-term relief might be contingent on further actions by the Fed and changes in labor data.
The housing inventory, interestingly, has seen a significant uptick despite the high mortgage rates, with a 21% increase compared to last year. This rise in available homes is largely attributed to expectations of rate cuts by the Fed, alongside cooling inflation and job markets, providing homeowners with more incentives to sell.
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However, the future of mortgage rates remains uncertain, with experts predicting little immediate change following the Fed’s March meeting. Most anticipate that while rates might not drop in the short term, there could be a decrease later in 2024, provided inflation approaches the Fed’s target range.
As the market braces for the inflation report’s impact, the brief decrease in mortgage rates serves as a reminder of the volatile nature of the housing market, driven by economic indicators and policy decisions. Homebuyers and owners are advised to stay informed and consider their options carefully as the year progresses.
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