It’s been a good week for mortgage rates. You can’t argue for that.
The 30-year-old fasting is now an average of about 6.80%, down from over 7% a week ago.
Apart from the psychological victory to drop 7 for a 6, the rates are now almost the lowest they have been since December.
Finally, there is also a feeling that they may be in the tendency for even lower and build momentum, instead of the main fans we saw as rates that were looked back and forth.
But there is only a small hitch. What does it mean for the wider economy?
Lower priority rates are large, for now
In the event that you did not notice it, the 30-year-old fasting is now stuck back below 7%. At the last glance, MND put it at 6.80%
This is down from 7.13% two weeks ago, an impressive decline of about a third of a percentage point.
And if we zoom out a little further out, the 30-year-old was approx. 7.25% in mid -January, which represented a decrease in almost half point.
I assume that this is welcome news for potential home buyers who are struggling with affordable prices.
It is also welcome news for home sellers who want to unload their properties at a time when affordable prices have never been worse. A nice point of sale.
And it could come at the perfect time when spring home -buying season began to swing in gear.
The timing is crucial and last year the mortgage rates moved in the wrong direction from March to May.
In addition, it will be a blessing for existing homeowners who bought properties in the last few years looking for interest rates.
If the mortgage rates continue to be lower, a much more rate and term refineration will make sense.
Although there is not a single rule of thumb for refinancing, the lower power priority rates are the better if you want to refinance.
So the chances are that we will see loan volume get a nice boost if this trend continues. This is also good news for fighting mortgage companies.
But what about the economy?
If you are wondering why the mortgage rates have fallen, the most important pick -up is that the economy worsens. And maybe fast.
The latest report revealed a major decrease in consumer confidence that experienced its biggest monthly decline since August 2021.
It was also the third drop in a row from month to month after watching retail sales after the biggest fall of almost two years.
Meanwhile, workers are facing the installation of redundancies in both the private and the public sectors, with the mass yard redundancies a disturbing and still evolving situation.
Then there is the argument that the private sector could take signals from the DOGE abrasives and look at their own internal staffing levels.
This means higher unemployment, worsening of household balances, more companies that cut jobs and go under.
Long history short, the economy begins to see shaking and shaking out, and that is why the mortgage rates have improved the past month and changes.
It is a bittersweet situation if you need a priority loan. After all, it’s hard to celebrate rising unemployment and slow down economic growth while shopping for a new home.
The same is true of a mortgage refinancing whose property values start to peak and maybe even fall.
Of course, low priority rates are large, but at what costs? You can get stuck in a home you “overpaid” for and may not be able to afford if conditions worsen.
We may need a high LTV refund option again
If you remember the mortgage crisis in the early 2000s, underwater loans were a major problem.
Millions of homeowners owed more on their priority loans than their properties were worth after house prices were fueled when funding ran dry and tariffmen could no longer overestimate properties.
A way in which the housing market was effectively “hidden” was through programs such as Home Affordable Refinance Program (Harp) that enabled refinancing, even if underwater.
The program is now part of the story, but its replacement, the “High LTV refund option” could be forced out of retirement.
Currently, Fannie Mae has this program on break, partly due to low volume (nobody needs it recently).
But with housing prices that are now under pressure, and recent home buyers may have in negative capital positions again in certain parts of the country, we may need to turn on these programs again.
After all, it would be a shame if the mortgage rates fell and these homeowners could not benefit if their loan-to-value conditions (LTV) were considered too high.
We face very uncertain times again, with a new administration that makes sweeping changes, while financial data is apparently cooled.
Good for mortgage rates, determined, but maybe not something else. Be careful out there.
Before creating this site, I worked as a banking director of a wholesale loan in Los Angeles. My practical experience in the early 2000s inspired me to start writing about mortgage loans 19 years ago to help potential (and existing) home buyers better navigate the home loan process. Follow me on x for hot take.
