Mortgage Mix: Affordability Improves as Mortgage Rates Level Off

Editor’s Note: The Mortgage Mix is RISMedia’s weekly highlight reel of need-to-know mortgage-industry happenings. Watch for it each Friday afternoon.

  • Mortgage rates saw very little movement this week, according to the latest Primary Mortgage Market Survey from Freddie Mac. The 30-year fixed-rate mortgage went from 6.63% last week to 6.64% this week, and the 15-year fixed-rate mortgage moved from 5.9% last week to 5.94% this week.
  • “The economy and labor market remain strong with wage growth outpacing inflation, which is keeping consumer spending robust,” commented Freddie Mac Chief Economist Sam Khater. “Meanwhile, affordability in the housing market is an ongoing issue due to continued high home prices, elevated mortgage rates and low supply of homes on the market, particularly for first-time and low-income homebuyers.”
  • Affordability pressures in the housing market are easing with the lowering of mortgage rates, according to ICE’s February 2024 Mortgage Monitor Report. The report found that the share of income needed to buy a median home in the U.S. decreased by nearly 5 percentage points in December from the 28-year high recorded in October.
  • Andy Walden, ICE’s vice president of enterprise research strategy, commented that, “In recent months, we’ve seen improvement in rates, affordability and for sale inventory, with monthly home price growth moderating on a seasonally adjusted basis. While we are still out of sync with historical norms on multiple fronts, each of those metrics have at least been moving in the right direction.”
  • With mortgage rates leveling off, homebuyers are taking advantage. According to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA), mortgage applications grew 3.7% this week. 
  • “Rates at these levels have not prompted much of a reaction in the refinance market, as most homeowners have mortgages with much lower rates,” commented MBA Vice President and Deputy Chief Economist Joel Kan. “However, purchase activity has been strong to start 2024 compared to the final quarter of 2023.”

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