Is now the time to buy?
Mortgage rates in the US declined for the seventh consecutive week, with the 30-year fixed-rate mortgage averaging 6.63%, down from 6.76% the previous week, data released by Freddie Mac showed on Thursday.
According to Bloomberg, this marks the largest weekly drop in mortgage rates since mid-September, offering relief to prospective homebuyers ahead of the peak spring homebuying season.
Sam Khater, Freddie Mac’s chief economist, stated that the decline in rates boosts purchasing power, potentially motivating more buyers to enter the market. “The decline in rates increases prospective homebuyers’ purchasing power and should provide a strong incentive to make a move,” he said in the announcement.
The recent trend in mortgage rates comes as economic concerns continue to weigh on financial markets. Earlier this week, US stock indices fell to their lowest levels since November’s election amid escalating trade tensions and signs of a slowdown in job growth. A report from USA Today noted that hiring slowed significantly in February, per data from payroll provider ADP, while reports from major retailers indicate a decline in consumer spending.
Spring homebuying season gains momentum
A seasonally adjusted measure of mortgage applications for home purchases increased by 9% for the week ending February 28, according to the Mortgage Bankers Association (MBA). Joel Kan, MBA’s deputy chief economist, noted that purchase activity generally rises this time of year, but the latest increase is encouraging. “These are more green shoots as we head into the spring homebuying season,” he said.
Despite the drop in rates, economic uncertainty continues to influence consumer behavior. Steve Reese, a real estate agent in Shawnee, Oklahoma, said in an interview with USA Today he observed that while activity in his market is picking up, it has not reached the levels he typically expects for this time of year. “What I’m hearing now is that people are really more guarded because of what they don’t know is coming down the pike economically,” Reese said.
Meanwhile, refinancing applications have surged, with the share of refinance activity rising to 44% of all mortgage applications, the highest level since mid-December. Khater noted that homeowners are increasingly looking to refinance as rates decline, taking advantage of lower borrowing costs.
Federal Reserve policymakers have indicated they will keep interest rates steady until inflation trends closer to the central bank’s 2% target. However, uncertainty remains over how ongoing economic factors, including potential inflationary pressures from trade tariffs, might influence future rate decisions.
What are your thoughts on the falling mortgage rates? Share them in the comments below.
