The rates for home loans have dropped to a 10-week low, but the housing market remains stagnant. As of the week ending on February 27, Freddie Mac announced that 30-year fixed-rate mortgages averaged 6.76%, marking the sixth consecutive weekly decline for this popular mortgage product and its lowest level since before Christmas. These figures do not account for fees or points, and it’s important to note that rates may vary in different regions of the country. In the previous week, the 30-year fixed-rate mortgage averaged 6.85%.
Despite initial expectations that rates might rise, the national housing market is struggling even at the current levels. The National Association of Realtors reported that home contract signings hit an all-time low in January, signaling a decline in future closings as well.
Lisa Sturtevant, Chief Economist at Bright MLS, attributed the decline in mortgage rates to the falling yield on the 10-year Treasury bond, reflecting concerns about a slowing economy. Sturtevant expressed optimism that the lower rates could provide a much-needed boost to the housing market.
Real estate professionals in different parts of the country are experiencing varying market conditions. Lisa Barall-Matt, a real estate broker in greater Hartford, Connecticut, noted that demand and prices in her market remain strong. With prices and rates high, current homeowners are less inclined to sell, leading to a limited inventory of properties.
In contrast, the Northeast was the only region to see gains in contract signings in January, according to the NAR. Sturtevant advised potential buyers not to wait for further rate drops, emphasizing that rates may fluctuate weekly but are gradually trending downward.
Despite the overall challenges in the housing market, there are pockets of resilience and opportunity for both buyers and sellers to navigate the evolving landscape.
