Mortgage rates stabilized this week despite newly released economic data.
The 30-year fixed-rate mortgage averaged 6.64% as of Feb. 8, a slight increase from last week’s figure of 6.63%, according to Freddie Mac’s Primary Mortgage Market Survey released on Thursday. Meanwhile, the 15-year fixed rate averaged 5.90% this week, down from 5.94% during the prior week. And HousingWire’s Mortgage Rates Center showed that Polly’s average 30-year fixed rate for conventional loans was 6.91% on Thursday, down from 6.95% at the same time last week.
“The economy and labor market remain strong with wage growth outpacing inflation, which is keeping consumer spending robust,” Freddie Mac chief economist Sam Khater said in a statement. “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.”
Last Friday, the January jobs report showed that the national economy added 353,000 new jobs, exceeding the monthly average of 255,000 new jobs per month in 2023. At the February meeting of the Federal Reserve Board of Governors, Chair Jerome Powell emphasized the unlikeliness of a rate cut in March as the latest economic data remain fairly strong.
Since the beginning of the year, mortgage rates have hovered in the range of 6.6% to 6.7%. But prospective buyers expect rates to decline further this year, which is fueling optimism. According to January’s Fannie Mae Home Purchase Sentiment Index, consumer sentiment toward housing reached its highest level since March 2022. But sentiment for market conditions did not improve drastically as only 17% of respondents indicated that it is a good time to buy a home.
As the busier spring buying season approaches, home shoppers will adopt different strategies depending on their mortgage rate expectations, according to Hannah Jones, senior economic research analyst at Realtor.com.
“Despite still-elevated rates, seller activity is up year-over-year with more homes actively listed and more sellers coming into the market than this time last year,” Jones said in a statement. “Both mortgage rates and home prices are slightly higher year-over-year, but more for-sale inventory may mean that this almost-spring market feels more favorable to buyers.”