Mortgage rates continued to rise due to significant market news. Federal Reserve Chair Jerome Powell’s recent statement at the Washington Forum indicated that there were no plans for rate cuts in the near future as a result of the strong U.S. economy. HousingWire’s Mortgage Rates Center reported that the average 30-year fixed rate for conventional loans reached 7.48% on Tuesday, up from 7.26% the previous week and significantly higher than the 6.54% average from a year ago. Additionally, the 15-year fixed rate increased to 6.72% on Tuesday from 6.66% the week before.
HousingWire lead analyst Logan Mohtashami shared his thoughts on the impact of these rising rates on the housing market. He predicted that higher rates would lead to an increase in housing inventory, which was starting to be seen. Despite the rate hikes, the demand for new homes remained strong, with a growth rate of 8.8% from February to March. As of April 19, there were 543,000 single-family homes on the market, a 3% increase from the previous week and a 31% increase from a year ago.
Altos Research founder and president, Mike Simonsen, noted that the recent mortgage rate increases were contributing to a rapid increase in unsold home inventory. However, one positive aspect mentioned by Mohtashami was the narrowing gap between mortgage rates and the 10-year Treasury yield. This trend could potentially have a stabilizing effect on the housing market in the long term.
Looking ahead, the release of the Personal Consumption Expenditures Price Index (PCE) for March was expected to provide insight into the Federal Reserve’s decisions regarding future interest rates. This data would play a crucial role in determining how mortgage rates could be affected in the coming months.