Housing Market Stays in Limbo as Mortgage Rates Decline

According to Freddie Mac, the average rate for a 30-year fixed home loan dropped from 6.87% to 6.86% for the week ending June 27. Mortgage rates continued to decline this week.

Chief economist of Freddie Mac, Sam Khater, released a statement saying, “The 30-year fixed-rate mortgage continues to trend down, hitting the lowest level in almost three months.”

The persistently high mortgage rate has essentially put the home market in a holding pattern for months, putting prospective buyers and sellers in limbo, even with the minor decline.

Economists from Bank of America stated this week that the housing market is “stuck, and we are not convinced it will become unstuck until 2026… or maybe even later,” confirming the opinion of real estate specialists that the market has been unable to advance recently.

In this week’s edition of “How’s the Housing Market This Week?” we break down the most recent data on the housing market and explain what it means for buyers and sellers.

The depreciation in mortgage rates

Mortgage rates have been stubbornly high for a very long time. At its most recent meeting, the Federal Reserve, which was originally expected to lower base interest rates three times this year, indicated that it was reluctant to do so. As a result, the future of mortgage rates depends on upcoming economic data. The Fed is likely to lower rates if inflation reaches a particular threshold. In the event that inflation increases more than anticipated, rates are likely to stay the same or increase.

Property values don’t change.

For the week ending June 22, the median list price did not change from the prior year. This is the fourth consecutive week that the home list price has remained at the same level as the previous year. The good news is that, despite the high median price of homes, Hale notes that there are currently “more abundant affordable options” available on the listing pages.

Housing supply increases

For the week ending June 22, one housing data item that did experience significant movement was home stock, with new listings increasing by 7.4% over the previous year. The overall quantity of properties for sale—including those that have been on the market for a while as well as those that have just been listed—rose 36.1% over the same period last year, continuing a trend of rising listings for 33 weeks.

Longer stays at home

For the week ending June 22, real estate listings were on the market for a longer period of time compared to this time last year. Some purchasers may be waiting for the market to cool down in the hopes of taking advantage of cheaper mortgage rates and prices.