Mortgage rates dipped, even though the U.S. Federal Reserve ruled out easing monetary policy in March as the economy remains strong and inflation slows.
Even though the Fed threw cold water on expectations that the central bank will begin to cut interest rates in March, some investors are hopeful for a cut following the meeting in May. Forecasters are expecting rate cuts to in turn push mortgage rates down this year.
The 30-year fixed-rate mortgage fell and averaged 6.63% as of Feb. 1, according to data released by Freddie Mac
It’s down 6 basis points from the previous week — one basis point is equal to one-hundredth of one percentage point.
A year ago, the 30-year was averaging at 6.09%.
The average rate on the 15-year mortgage was 5.94%, down from 5.96% last week. The 15-year was at 5.14% a year ago.
Freddie Mac’s weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage.
Separate data by Mortgage News Daily said that the 30-year fixed-rate mortgage was averaging at 6.75% as of Thursday afternoon.
What Freddie Mac said: “The combination of a solid economy, strong demographics and lower mortgage rates are setting the stage for a more robust housing market,” Sam Khater, chief economist at Freddie Mac, said in a statement.
And even though rates have bounced around the high 6% range for now, “with continued deceleration in inflation we expect rates to decline further,” he added.
What are they saying? “There is anticipation that the Fed will begin to cut rates this spring. Mortgage rates, though not directly tied to the Federal funds rate, are also expected to come down this year,” Lisa Sturtevant, chief economist at Bright MLS, said in a statement.
“Falling mortgage rates could make housing more affordable, but it’s not a guarantee,” she added. “Lower rates will draw more buyers into the market, creating more competition, and putting upward pressure on prices.”