Report: Mortgage Rates Ease

HousingWire’s Mortgage Rate Center reported a modest decline in mortgage rates, showing the average 30-year fixed rate for conventional loans at 7.08% on Tuesday, down slightly from 7.17% the previous week. This decrease offers a brief respite for borrowers; however, the relief may be short-lived, as strong inflation data released on Tuesday is expected to reverse this downward trend. Consumer prices in February rose by 3.2% from a year earlier, according to the U.S. Bureau of Labor Statistics.

Looking back one year, the 30-year fixed rate averaged 6.83%, indicating a significant increase in mortgage rates over the past year. Similarly, the 15-year fixed rate averaged 6.46% on Tuesday, down from 6.5% one week earlier, but still higher than the 6.07% average recorded a year ago.

Housing inventory has been on the rise for the past two years, despite the uptick in mortgage rates. Inventory is currently 21% higher than at the same time last year, a trend attributed to the Fed’s potential commitment to rate cuts, as well as cooling inflation and job markets, which are encouraging more homeowners to sell.

In the week ending March 8, there were over 500,000 single-family homes on the market in the U.S., reflecting a 0.5% increase from the previous week and a 21% increase from one year ago. This surge in inventory suggests a potentially significant shift in the housing market, with implications for both buyers and sellers.

Regional variations in inventory levels have become more pronounced, with Gulf Coast markets experiencing a notable increase in supply levels, surpassing pre-pandemic benchmarks. In contrast, Northeastern and Midwestern markets have been slower to recover from pandemic-induced lows, resulting in a more subdued increase in inventory.

Despite the overall rise in inventory, the available inventory of unsold homes on the market was 59,000 last week, marking a 15% increase from a year earlier. This disparity underscores the complex dynamics at play in the housing market, with factors such as mortgage rates, inflation, and regional economic conditions all influencing supply and demand dynamics.