Mortgage rates fall for the second week in a row

Mortgage rates went down for the second consecutive week, allowing some purchasers to return to their purchase plans despite inventory issues.

According to Freddie Mac, the 30-year fixed mortgage’s rate dropped from 6.39% the previous week to 6.35% this week. The Federal Reserve might decide to halt its aggressive rate-hike campaign in light of the dip, which comes after two official announcements this week that showed inflation had once again fallen.

While some potential homebuyers took advantage of the price drop this week, many are still very sensitive to affordability challenges as home prices climb this spring. This spring, sellers have been noticeably less active, which has made the inventory scarcity worse.

According to Keith Gumbinger, vice president of, “Things are pretty slow right now, but you would expect that given the kind of conditions, we’ve been experiencing.” “Mortgage rates are still fairly high; they aren’t quite at the 7% level right now, but they are high enough. Of course, availability and affordability continue to be problems.

‘Nothing on the shelf’

Even though some homebuyers reacted quickly to the recent drop in rates, it wasn’t enough to bring demand back to levels from the previous year, which is another indication that affordability is still a major worry this year.

According to the Mortgage Bankers Association’s most recent survey for May 5, the number of mortgage applications to buy a home jumped 5% from the prior week. On a seasonally unadjusted basis, however, overall buying activity was still 32% lower than it had been the previous year.

The MBA identified three issues that are slowing the market this spring.

First, some lenders have tightened requirements as a result of the recent economic meltdown, especially for jumbo loans used to buy more expensive homes. Second, persistently high mortgage rates have discouraged many first-time buyers. The third and most troubling factor is the absence of available homes for sale.

Inventory is a major issue, according to Gumbinger. “We’ve found that borrowers can adjust to higher interest rates over time. However, if nothing is available for purchase, it makes no difference how well you align with the market dynamics because there is nothing in the store or on the shelves.

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