Weekly Mortgage Rates Remain Steady Near 6%

Predictability is key when monitoring mortgage rates. This week brought no surprises, following a trend of stability.

The average 30-year fixed-rate mortgage dipped two basis points to 5.99% for the week ending Feb. 12, based on data from Zillow provided to BW. A basis point represents one one-hundredth of a percentage point. Over the past eight weeks, the weekly average has remained within a narrow range of 5.9% to 6.1%.

What’s driving this consistent trend — and how can homebuyers secure an advantageous deal? Let’s delve into the details.

January’s employment report exceeded expectations, indicating that the economy is maintaining its momentum. The latest data from the Labor Department revealed an addition of 130,000 jobs last month, with a slight improvement in the unemployment rate to 4.3%.

However, beneath the positive headline lies a significant revelation. Revisions to the jobs data for the past two years unveiled weaker job growth than initially reported, with a revision of over 1 million jobs.

For the Federal Reserve, which indirectly impacts mortgage rates through the federal funds rate, current conditions hold more weight than historical data. Following the robust January jobs report, most analysts anticipate the Fed to maintain the federal funds rate at its upcoming meeting in March.

January typically witnesses a slowdown in home sales, exacerbated this year by a winter storm that gripped the nation. Existing home sales declined by 8.4% from December to January, accompanied by a 0.8% drop in available inventory.

Lawrence Yun, NAR’s chief economist, expressed disappointment over the sales decrease, attributing it to extreme weather conditions. As February progresses, an increase in inventory is expected, offering optimism to prospective buyers.

The traditional influx of inventory in February could brighten the outlook for buyers in the current market.

During the upcoming Fed meeting on March 17-18, policymakers will evaluate the resilient labor market against their ongoing battle with inflation. Insights from key January reports, including the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) report, will influence their decision.

Should January’s inflation data reveal minimal cooling, the Fed is likely to delay a rate cut. Consequently, mortgage rates are expected to remain stable rather than experiencing a significant decline. In essence, steady economic indicators could translate to consistent borrowing expenses.

Consistent mortgage rates offer reassurance to buyers, eliminating the uncertainty of timing the perfect rate lock. This stability allows individuals to focus on comparing lender offers and ensuring that monthly payments align with their budget.