Signs of good news for consumers are starting to sprinkle into our economy. Mortgage interest rates dropped to 6.87% for a 30-year loan and 6.13% for a 15-year loan. The trendline for mortgage rates is moving in the right direction for consumers, as they have consistently dipped since May 2nd’s report. Mortgage rates were at a high of 7.79% for a 30-year mortgage as of October 26th, 2023, and after a decrease to 6.60% in mid-January, rates were consistently moving upwards.
Until rates consistently stay under 7%, it’s difficult to say if this trend will be here to stay. On August 10th, 2023, rates rose over 7% and moved up and down over the next several months. Before that date in August, rates had not hit 7% since November of 2022. We saw interest rates skyrocket in early 2022, as the Federal Reserve looked to combat sky-high home prices. Before 2022, interest rates were consistently below 4% for almost three straight years.
With the recent announcement from the Fed stating that interest rates will see no change for now, the natural progression for mortgage rates is a sign of positivity for consumers looking to purchase a new home. If home prices dip, along with interest rates, consumers may see a strong housing market, at least for those looking to purchase a home. 2020 saw massive price increases in home prices, and since then the prices have only increased.
Positive news is always welcome in this vague economy. Next, we hope to see another positive inflation report. The most recent report showed a net zero change in inflation for May. If we see several positive reports regarding inflation and a stronger economy overall, the Fed may then consider lowering interest rates. Until then, we patiently wait. For more information on increasing your financial literacy, check out all of our resources to guide you toward financial freedom.
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