Mortgage rates declined again, according to the Primary Mortgage Market Survey published by Freddie Mac (OTCQB: FMCC).
The 30-year fixed-rate mortgage averaged 6.95% as of June 13, down from last week when it averaged 6.99%. A year ago at this time, it averaged 6.69%.
The 15-year fixed-rate mortgage averaged 6.17%, down from last week when it averaged 6.29%. A year ago at this time, it averaged 6.10%.
“Mortgage rates continued to fall back this week as incoming data suggests the economy is cooling to a more sustainable level of growth,” said Sam Khater, Freddie Mac’s Chief Economist. “Top-line inflation numbers were flat but shelter inflation, which measures rent and homeownership costs, increased showing that housing affordability continues to be an ongoing impediment for buyers on the house hunt.”
Good direction but not adequate to stimulate purchases.
The problem is that housing prices have almost doubled in the last few years. Although interest rates are where they were for decades, previously, the new home prices coupled with the current interest rates makes housing almost unaffordable, in general. For cash buyers, interest rates are of no concern. However, for mortgage purposes, the housing market is still out of the reach of many. Housing prices will need to fall or interest rates will need to go further to make housing affordable.