Housing News

Mortgage Interest Rates Tick Up Slightly

Mortgage interest rates ticked up a little as the war in Iran continued to push up rates.

Interest rates averaged 6.3% for 30-year, fixed-rate loans in the week ending April 30, according to Freddie Mac. That was up from 6.23% in the previous week.

However, rates are down nearly half a percentage point from 6.76% from this time a year ago. Combined with slightly lower home prices, that makes buying a home more affordable in many markets than it was last spring.

The typical home list price was down 2.2% year-over-year in March to a median of $415,450 nationally, according to the most recent Realtor.com data.

“As rates had modestly declined the last few weeks, purchase demand has accelerated with purchase applications rising to over 20% above a year ago,” said Freddie Mac Chief Economist Sam Khater in a statement.

“It is clear that purchase demand continues to hold up as prospective buyers react to both modestly lower rates and more inventory to choose from than the last few years,” he said.

Mortgage applications to buy a home rose 21% year-over-year in the week ending April 24, according to the Mortgage Bankers Association (MBA).

Applications to refinance an existing loan were 51% higher than the same week last year, according to MBA.

Many real estate experts expect that rates will remain in the low 6% range until the war in Iran is resolved.

The U.S. Federal Reserve kept its short-term interest rates unchanged at its meeting this week.

While the Federal Funds rate is different from mortgage rates, mortgage rates are influenced by the Fed’s rate. So, if the Fed indicates rate cuts are on the horizon, mortgage interest rates are likely to come down.

“The fact remains that we are not going to see rates fall below 6% anytime soon,” said Bright MLS Chief Economist Lisa Sturtevant in a statement. The multiple listing service covers the mid-Atlantic region.

“Geopolitical and labor market uncertainty create headwinds to housing market activity,” she said. “But changing family circumstances and needs will bring out buyers and sellers despite that uncertainty.”