[The Epoch Times, March 14, 2023](The Epoch Times reporter Gao Sugi compiled a report) The average interest rate on the popular 30-year fixed-rate home mortgage in the United States fell to 6.57% on Monday (March 13), which is That’s down from Friday’s 6.76% and Wednesday’s (March 8) recent high of 7.05%.
Mortgage rates tend to loosely track changes in the 10-year Treasury yield, according to Mortgage News Daily. Treasury yields have fallen to recent one-month lows due to the recent collapse of Silicon Valley Bank and Signature Bank, and the ensuing knock-on effects across the banking sector across the country.
In terms of real impact, for a buyer looking to purchase a $500,000 home with a 20% down payment on a 30-year fixed mortgage, the monthly payment is $128 less this week than last week. However, it remained above January’s level.
So, what does this mean for the housing market this spring?
In October, interest rates spiked past 7%, kicking off a real slowdown in home sales. But then, rates began to slowly come back down in December and were near 6% by the end of January. That led to a surprising 8% jump in pending home sales. The metric is the National Association of Realtors’ measure of the number of existing home sales that are under contract but not closed.
Sales of new homes, as measured by the number of signed contracts by the Census Bureau, were also well above expectations.
While figures for February are not yet in, in related news, brokers and builders are reporting a sharp pullback in sales in February amid another spike in interest rates. So if the current drop in interest rates is here to stay, buyers are likely to come back again. However, that’s a big “if”.
Matthew Graham, chief operating officer of Mortgage News Daily, commented: “This mini banking crisis has to drive a change in consumer behavior to have a longer-lasting positive effect on rates. impact, it’s still all about inflation.”
He also added that markets must now grapple with “the inflationary impact of consumer fears.”
He pointed to a new consumer price index report on Tuesday (March 14). It is a monthly measure of the level of inflation in the economy.
Just last week, Federal Reserve Chairman Jerome Powell told members of Congress that the latest economic data was better than expected.
“If the full body of data suggests that faster tightening is warranted, we will be prepared to increase the pace of rate hikes,” Powell said.
While mortgage rates don’t exactly track changes in the federal funds rate, they are still largely influenced by the Federal Reserve’s monetary policy and its views on future inflation.
Responsible Editor: Ye Ziwei#