The average 30-year fixed-rate mortgage (FRM) fell by 9 basis points this week to 6.38%, according to Freddie Mac. That marks the first drop in five weeks as rates cooled from a six-month high. Homebuilding stocks, including D.R. Horton (DHI), Lennar (LEN), and PulteGroup (PHM), are trading higher on the news.
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Trade QQQ with leverageRates edged lower after the U.S. and Iran agreed to a two-week ceasefire. That caused the 10-year Treasury yield, which the 30-year FRM closely tracks, to fall below 4.3% as fears of inflation eased.
Home Affordability Issues Persist as Sellers Slash Prices
Rates are still well above the 6% level, restricting home-buying affordability for Americans. Relief may be on the way, as a record 34.2% of home sellers lowered prices in February, up from 31.5% year-over-year, according to Redfin. The average reduction was 7.3%, or $40,915.
At the same time, uncertainty remains high ahead of U.S.-Iran peace talks this weekend. In addition, the war has complicated the Fed’s interest rate outlook, with several officials leaning toward holding rates steady to account for the risk of higher prices.