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Lower mortgage rates are luring some homebuyers back

The daily average mortgage rate topped 7% a week ago last Wednesday, hitting a four-month high. It has the banking crisis that has been unfolding in the United States helped to push the interest rate on home loans down. The daily average for 30-year fixed-rate mortgages ended this week at 6.55%, half a point below the March 8 peak.

“Buyers pounced when prices fell because they are so volatile right now, which shows that there are plenty of people waiting in the wings for the right time to enter the market,” said Redfin Economics Research Lead Chen Zhao. “Where mortgage rates go from here depends largely on how the Fed responds to chaos in the banking sector in the United States and abroad along with stubbornly high inflation.”

While the lower prices make it cheaper to buy a home and prices fall, the average mortgage payment is still almost a quarter more than it was last year. And despite home buyers rushing to get a lower interest rate, overall market demand remains weak. Pending home sales are down 17% compared to 12 months ago, the biggest drop in six weeks.

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