Mortgage rates were mostly flat this week, with the average rate for a 30-year fixed-rate mortgage hovering at 6.95%.
That’s down slightly from last week when it averaged 6.96% but up from a year ago when it was 6.63%, according to Freddie Mac’s Primary Mortgage Market Survey.
“The 30-year fixed-rate has hovered between 6 percent and 7 percent for most of the last two and a half years,” says Sam Khater, chief economist for Freddie Mac, in a statement. “That trend continued this week, with the average rate remaining essentially flat at 6.95 percent.”
“Driven by these higher rates and a persistent supply shortage, affordability hurdles still exist for many homebuyers and a significant number of them remain on the sidelines,” Khater adds.
The average rate for a 15-year fixed-rate mortgage was 6.12%, down from last week when it averaged 6.16% and down from a year ago when it averaged 5.94%.
Yesterday, as was expected, the Federal Open Market Committee, citing that inflation remains “elevated,” voted to maintain the target range for the federal funds rate at 4.25% to 4.5%.
In a statement, Samir Dedhia, CEO of One Real Mortgage, notes that the slight drop in mortgage rates this week “marks the second consecutive week of rate decreases after six weeks of increases, offering some continued relief for homebuyers.”
“Despite the Federal Reserve’s decision to pause rate hikes yesterday, the mortgage-backed securities market remains stable, showing optimism for potential rate cuts in 2025 – sooner, rather than later,” Dedhia says. “With minimal market movement following the Fed’s announcement, investors appear to be pricing in a more predictable rate environment.”
Dedhia adds that although rate volatility “may persist through the first quarter as markets react to inflationary pressures tied to new government policies,” he anticipates “less turbulence than previously expected.”
“The fact that rates did not increase week-over-week is a strong sign that the increases in rates may be over, but we’re still in a wait and watch approach for Q1,” Dedhia says.