The current 30-year fixed mortgage rate sits at 6.3%, down 0.4% from a month ago. Mortgage rates determine a potential homebuyer's monthly payment, which influences the value of the home they can afford to purchase. Buying a home becomes less affordable with high mortgage rates. Conversely, lower rates can boost home sales.
The recent decline in mortgage rates from early 2023 correlates with declining 10-year treasury yields. Mortgages and treasury bonds compete for similar long-term buyers, with their rates generally following each other. With declining mortgage rates, borrowing costs are becoming more affordable for potential homeowners.
Concurrently, mortgage rates continue to trend downward toward the 15-year median rate of 3.99% (from 2008 to today). As rates decline, mortgage rates remain lower today than historically. For instance, the median mortgage rate over the previous 40 years was 6.56%, and 7.42% over the previous 50 years.
As mortgage rates continue to decline, a report by Freddie Mac cites ample housing demand within the home-buying market driven by first-time homebuyers. Most forecasters predict mortgage rates will remain around 6% into late 2023.
Changes in mortgage rates will continue to influence affordability, housing inventory, and pricing. Do you want to learn more about other current market conditions or trends that influence the US housing market? Plotify has you covered. Download our app today to receive regular insights and updates.
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