Residential News » Washington D.C. Edition | By WPJ Staff | January 27, 2023 8:30 AM ET
According to Freddie Mac's latest Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.13 percent as of January 26, 2023.
"Mortgage rates continue to tick down and, as a result, home purchase demand is thawing from the months-long freeze that gripped the housing market," said Sam Khater, Freddie Mac's Chief Economist. "Potential homebuyers remain sensitive to changes in mortgage rates, but ample demand remains, fueled by first-time homebuyers."
Freddie Mac News Facts
Nadia Evangelou, the National Association of Realtors senior economist and director of real estate research commented, "Mortgage rates continue to remain near the 6% threshold. According to Freddie Mac, the rate on a 30-year fixed mortgage dropped to 6.13% from 6.15% the previous week. Mortgage rates may fall even further in the following weeks as investors expect the Federal Reserve to take a smaller rate hike in February thanks to easing inflation. In fact, this is the first time after nearly two years that the inflation rate is finally lower than it was the previous year. This means that consumer prices are higher, but they will rise at a slower pace than a year ago. At the end of 2022, the inflation rate was 6.5% compared to 7.0% in 2021. As people realize that the 3% rates are not coming back anytime soon, mortgage applications have picked up. What should we expect from the housing market as the spring season is nearing? Generally, home sales activity increases by 33% in March compared to February, with nearly 420,000 homes sold on average in March. However, in the last couple of years, activity was even busier due to low mortgage rates. Even though rates were rising last March, many buyers were rushing to benefit from the 4% rates during that time. Given low affordability and inventory, activity may not ramp up so fast in the spring season this year, but it will definitely be busier than it currently is. Meanwhile, a stronger housing market could help the U.S. economy to skirt a recession."