Mortgage rates fall as fears about the US economy loom
Realtor.com chief economist shares her advice for homebuyers and sellersReplayMore Videos ... (16 Videos)Realtor.com chief economist shares her advice for homebuyers and sellersIs the US in a recession? Hear what Jerome Powell thinks'I don't want to go bankrupt': High inflation leaves little room for unexpected costsFood bank demand skyrockets as cash-strapped Americans seek help over inflationHear Goldman Sachs CEO's message to the Biden administrationProducts on the shelves getting smaller? You can blame 'shrinkflation'What the country's largest gathering of truckers has to say about the economyAmid inflation, economist warns avoiding recession won't be 'easy path'What can Biden actually do about inflation? History is a guide'Worse than we anticipated:' CNN reporter breaks down inflation dataLook back at when the euro hit parity with the dollar in 2002'America's job machine is firing on all cylinders': Romans on the June jobs reportRecession is likely coming. How bad will it be?Child care costs are rising. See how parents are copingCiti chief economist: Recession risk is rising'Pay rent or buy some food': Millions of renters unsure if they can make rentMortgage rates dropped last week, as fears grow that the US economy is entering a recession.
The 30-year fixed-rate mortgage averaged 5.30% in the week ending July 28, down from 5.54% the week before, according to Freddie Mac. That is still significantly higher than this time last year when it was 2.80%.What will my monthly mortgage payment be?Rates rose sharply at the start of the year, hitting a high of 5.81% in mid-June. But since then, concerns about inflation and the possibility that the US economy may be entering a recession have made them more volatile.The demand to buy a home continues to tumble as buyers face higher rates, record-high home prices, increased recession risk, and declining consumer confidence, said Sam Khater, Freddie Mac's Chief Economist. "It's clear that over the past two years, the combination of the pandemic, record low mortgage rates, and the opportunity to work remotely spurred greater demand," Khater said. "Now, as the market adjusts to a higher rate environment, we are seeing a period of deflated sales activity until the market normalizes."Read MoreMortgage rates fell last week as investors anticipated yet another 75 basis-point rate hike from the Federal Reserve. It was the second hike of that size in as many months.The Federal Reserve does not set the interest rates borrowers pay on mortgages directly. The rates tend to track 10-year US Treasury bonds, which fell last week ahead of the central bank's meeting. But they are indirectly impacted by the Fed's efforts to tame inflation. The Fed also said in its announcement Wednesday that the central bank may moderate its pace of policy rate increases in the months ahead. "The statement was welcomed by financial markets as a sign that the Fed expects inflation to slow more noticeably, requiring a less aggressive response," said George Ratiu, Realtor.com manager of economic research. "These moves are expected to keep upward pressure on borrowing costs including mortgage rates moving forward."Click Here To Get Funded!