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Mortgage rates have continued their sluggish decline for a third consecutive week, but the housing market remains costly as interest rates are still hovering above 6%, according to the weekly survey from mortgage giant Freddie Mac.
As of Thursday, June 22, the 30-year, fixed-rate mortgage averaged 6.67%, down from 6.69% the week before, the survey shows. A year ago, the rate averaged 5.81%.
The 15-year, fixed-rate mortgage shows a similar trend. As of June 22, the rate averaged 6.03%, a drop from 6.10% a week earlier but much higher than the 4.92% average a year earlier.
“Potential homebuyers have been watching rates closely and are waiting to come off the sidelines. However, inventory challenges persist as the number of existing homes for sale remains very low,” Sam Khater, chief economist at Freddie Mac, said in a news release announcing the survey results.
Figures for the survey come from conventional mortgage applications submitted to lenders across the U.S. and then sent to Freddie Mac. Freddie Mac is a government-sponsored enterprise that buys mortgages and packages them as mortgage-backed securities.
Mortgage Rates Projected To Drop Further this Year
Some economists are now projecting mortgage rates will drop further, partly because the Federal Reserve said it would slow the pace of its rate hikes going forward, after it announced a pause at its June 14 meeting.
Realtor.com predicts the average mortgage rate will land at 6.1% by the end of 2023, lower than its previous estimate of 7.1%, according to a June 22 statement.
“The Fed has indicated there might be two more rate increases this year,” Realtor.com said. “Once the Fed’s rate increases are done, mortgage rates are poised to fall a little.”
Tips For Home Shoppers: Should I Get A Mortgage Now?
With rates more than double their January 2022 level and housing prices still elevated, it’s tough to figure out if getting a mortgage now is a good plan, especially given predictions that rates might decline later this year.
Related: Mortgage Rate Forecast For 2023
Your decision to buy a home should be based less on mortgage rates and more on your personal financial situation and the specifics of the house you are considering. If you’ve found a home that you can comfortably afford, at a price you don’t expect to see in the near future, buying now might be wise. There will always be an opportunity to refinance at a lower rate when interest rates do drop. Alternatively, you can put down more cash now to buy down your current rate.
Related: Mortgage Refinance Calculator
On the other hand, if it’s not urgent to buy a home soon, then you could benefit by waiting for a lower rate. Using that time to save for a larger down payment will put you in a stronger financial position when you apply for a mortgage.
Related: Best Mortgage Lenders
