The average 30-year fixed-rate mortgage rate in the U.S. has fallen below 6% for the first time since September 2022. The rate sits at 5.98%, down from 6.01% in the prior week and 6.76% a year ago, according to data from Freddie Mac (FMCC) released on Thursday.
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Forget margin or options. Here's how the pros trade QQQReal estate experts note that mortgage rates in the psychological 5% range could attract more buyers into the market and result in higher demand for refinancing. The lower rates arrive just ahead of spring, a period that typically sees increased home-buying activity. “With a sub-6% rate, we’ll get reliable sales growth across the country,” said Compass Chief Economist Mike Simonsen.
Higher Costs May Limit Housing Demand
Others aren’t so sure that lower rates will lead to higher demand. Whelan Advisory CEO Margaret Whelan notes that consumer sentiment remains subdued alongside a labor market that has shown signs of weakening. In addition, both electricity and home insurance costs have risen, making it more expensive to own a home.
Economists expect rates to stay in the high 5% to low 6% range for the remainder of the year. Fannie Mae (FNMA) expects an average rate of 6%, while the Mortgage Bankers Association predicts a 6.1% rate.