The 30-year fixed rate loan continued to move downward,
It averaged 6.86% as of June 27, compared with 6.87% one week prior but up from 6.71% for the same period one year ago, the Primary Mortgage Market Survey found. The last time this rate was lower
It diverged from the week-to-week movement in the 15-year FRM. The average for these loans rose to 6.16%, compared with last week when it was 6.13%. A
"The 30-year fixed-rate mortgage continues to trend down, hitting the lowest level in almost three months," said Sam Khater, Freddie Mac's chief economist, in a press release. "By historical standards, the economy is in good shape, and we expect rates to continue to come down over the summer months, bringing additional homebuyers back into the market."
Rate movements as tracked by Freddie Mac reflected those of the 10-year Treasury yield at least for most of the past week.
While the 10-year Treasury remained in a narrow range for most of the past seven days, on June 26, it rose 8 basis points from its prior close to 4.32%, its highest close since June 11.
But in early morning trading on Thursday, it was back down to 4.29%.
That has yet to translate to mortgage pricing. Zillow's rate tracker as of 11:45 a.m. was up 3 basis points from the previous day and 12 basis points from the previous week's average to 6.66%.
Rates for the 30-year FRM from the Lender Price product and pricing engine posted on the National Mortgage News website at 10:20 a.m. on Thursday morning was back over 7%, to 7.021%, by 11:45 a.m. it was at 6.995%. But this was still nearly 14 basis points higher than the 6.86% it was at one week ago.
Even with rates rising, they have been relatively flat throughout June, and much lower than they were this past Spring, said Orphe Divounguy, senior economist at Zillow Home Loans.
"The recent economic data suggest economic growth will slow and inflation could return to the Fed's 2% target sooner than previously anticipated," Divounguy said in a Wednesday night statement. "Moderating consumer spending,
Pending home sales fell 2.1% month-to-month in May, a Thursday morning announcement said, but the outlook is somewhat better because of how rates moved in June, said Odeta Kushi, deputy chief economist at First American Financial.
"If mortgage rates continue their descent alongside rising inventory levels, some buyers may be enticed off the sidelines and boost the summer home-buying season," Kushi said in a statement. "Nevertheless, a robust summer recovery is unlikely given ongoing affordability constraints."
The Mortgage Bankers Association's
"Housing inventory is rising, albeit from very low levels, and mortgage rates are now below 7%," said Bob Broeksmit, the MBA's president and CEO, in a Thursday morning statement. "This is good news for prospective buyers — especially those with children — looking to move before the school year begins."
The June 28 Personal Consumption Expenditures index release is the next milestone that could affect rate movements as investors use the data to adjust their inflation forecasts.
"Core inflation is expected to have moderated further over the past month," Divounguy said. However, a higher-than-expected inflation print could undo progress and push rates higher."
