Mortgage Rates Continue Falling as Homebuying Season Begins
Mortgage interest rates have been steadily declining for the past month, making it a good time for homebuyers and sellers to enter the spring housing market.
The average fixed rate for a 30-year mortgage fell to 6.83%, the fourth consecutive week of decline in mortgage rates. The rates on long-term fixed rate mortgages including FHA loans, VA loans, and jumbo loans all fell during the week. The short-term and adjustable mortgage rates were essentially the same.
Below are the current mortgage rates without discount points, as of April 6, 2018.
Purchase loans for VA: 5.96% at 0.05 points (down from 6.02% one week ago).
"Mortgage rates are continuing to trend down into the traditional spring homebuying seasons. The low inventory of homes available for purchase, particularly for first-time buyers, is causing many problems for those looking to buy.
- Sam Khater is chief economist at Freddie Mac
Prospective homebuyers have more reason to enter the market because the average rate for a 30-year fixed mortgage has been steadily declining over the past month. Rate fluctuations are very important to today's homebuyers. A drop in mortgage rates in February led to a rebound in home sales.
The housing stock is still very limited at this point. Sellers are still waiting for a lower mortgage rate, so they're not selling. Buyers may find a more competitive marketplace if the mortgage rate relief this month causes an additional bump in demand. If mortgage rates drop further in 2023 as predicted, the inventory crisis could continue well into the fall homebuying season.
Spring 2023 Mortgage Rates Forecast
U.S. News interviewed leading housing economists to find out their predictions for mortgage rates ahead of spring 2023's homebuying season.
Erika GiovanettiMarch 31, 2023
Indicator of Week: The Best Week to Sell a House
According to Realtor.com, April 16-22 is the best week to list your home for sale in 2023. This time of year is a great time to sell a home because there is more buyer demand than average, higher listing prices, and increased sales activity.
Spring homebuyers are more likely to begin looking for homes earlier than sellers, which means that the demand and competition is higher in spring. The average number of home listings viewed during the second week of April in 2018 was 16.4% higher than that for the usual week. The average time a home remains on the market for homes listed during this week is 11 days. This is 18% quicker than the average week.
Home listing prices have been 2.1% higher in the weeks of April 16-22, according to historical records. This trend could continue in 2023 when the median home listing price for this week is $8,400 higher than the average week in 2019.
However, spring homebuying could be a departure from seasonal trends. Spring home sales activity has been on the rise in recent years as buyers scrambled for a record-low mortgage rate of sub-3%. This is definitely not the case with current mortgage rates.
"This spring season will be different than the white-hot springs in 2021 and 2022. As buyers and sellers consider whether to wait for conditions to improve or dip in, the current market has lower demand.
Hannah Jones, economist at Realtor.com
Even though mortgage rates are still about twice as high than they were a year ago (about twice), there have been some signs of improvement in the last few weeks. Because of the affordability implications of volatile mortgage rates on lower-priced homes where inventory is still lagging, competition for these homes will continue to be fierce.
Jones states that buyers are looking for high-priced listings. Sellers can get to know their local markets and list a well-maintained property for a competitive price.
Although the overall trend is for home prices to decrease, it's likely that they will continue to fall due to more balanced market conditions. However, the actual numbers will vary depending on where you live. The rapid appreciation of home prices over the past few years has kept home prices high. However, those home values that are still very sticky won't be able to recover to their pre-pandemic levels.
Even though buyers won't be able to erase two years worth of price increases, they have greater bargaining power now than in 2021 or 2022. Spring homebuyers won't have to skip home inspections, waive appraisal contingencies, or offer a higher price to close the deal. Sellers may have to be open to making concessions in order to attract buyers. This is not a bad thing. It's just a return of relative normalcy.