Although mortgage rates have gone down, applications for mortgages also went down by 0.7%.
Mortgage rates continued their slight decline this week, Freddie Mac reported. For 30-year fixed-rate mortgages, the average interest rate is 6.79%, down from last week’s average of 6.87%. Last year at this time, mortgage rates for 30-year mortgages averaged closer to the bottom of the 6% range at 6.35%. "Mortgage rates moved slightly lower this week, providing a bit more room in the budgets of some prospective homebuyers," Sam Khater, Freddie Mac’s Chief Economist, said.
While rates are dropping, buyers aren’t yet fully committed to buying. Mortgage applications decreased 0.7% from a week earlier, according to the Mortgage Bankers Association’s weekly survey. Compared to a year ago, MBA’s unadjusted Purchase Index was 16% lower, signaling a struggle to keep buyers in the market. "Mortgage application activity was muted last week despite slightly lower mortgage rates.
It’s officially become cheaper to rent than to buy in many of the country’s major metro areas. A recent report from Realtor.com revealed that a starter home is more affordable than buying one in the 50 largest metros. In February 2024, the average monthly cost of buying a starter home was $1,027, which is 60.1% higher than the average cost of renting. Although the rental market appears hot, the U.S. median rent declined year-over-year, according to Realtor.com.
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