Boston condo mortgage rates: what’s next?
Boston condo mortgage rates: what’s next?
Mortgage rates continue to decline as the housing market gets ready for the spring homebuying season, extending a recent run of lower rates that many experts expect to continue for the rest of the year.
The average 30-year fixed rate mortgage was 6.28% during the week ended April 6, 2023, according to Freddie Mac. That was down from 6.32% the previous week and below the four-week average of 6.41%. Current rates are still well up from a year ago, when they hovered just below 5%, but have fallen sharply since peaking at 7.08% in 2022.
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What indeed! There are more questions than answers right now. Some say the bank failures are evidence that the Fed’s tough interest rate policies have “broken something,” and they must now dial back their intensity.
Others say the Fed knew some things would “break” and that they’ll only dial back if lower inflation says they can. To that, others say that inflation is even more likely to move down now that people are worried about the banking system and a recession.
And to that I say we just don’t know yet. All we do know is that these bank failures are very different than those seen before the financial crisis in several important ways. We also know the Fed/FDIC/Treasury stepped in with a non-taxpayer-funded plan to calm the market, and it seems to generally be working today.
If the market is calmer, then why are rates still so much lower? This has to do with the market shifting its expectations for Fed rate hikes in the rest of 2023. Specifically, the market now sees the Fed hitting a ceiling rate that’s more than 1.5% lower than it was at the beginning of last week!
If that continues to be the case in the coming days, mortgage rates could move down even more. We’ll learn more about those odds…