Mortgage rates remained flat this week ahead of the next meeting of the Federal Open Market Committee (FOMC).
HousingWire’s Mortgage Rates Center showed the average 30-year fixed rate for conventional loans at 7.07% on Tuesday, down from 7.08% one week earlier. At the same time one year ago, the 30-year fixed rate averaged 6.69%. Meanwhile, the 15-year fixed rate averaged 6.5% on Tuesday, up from 6.46% one week earlier.
Also on Tuesday, the 10-year Treasury yield dropped to 4.3%.
“Everyone awaits the Fed’s meeting as the 10-year yield is at a critical level,” HousingWire lead analyst Logan Mohtashami said. “Last year when we were here with the 10-year yield, they went very hawkish with their statement, which sent mortgage rates toward 8%. Everyone is waiting to hear the Fed’s language because it has the potential to send rates much higher”
As of March 18, mortgage rates were 30 to 40 basis points higher than on Jan. 1, 2024, according to Mike Simonsen, founder and president of Altos Research.
As mortgage rates rise, the number of unsold homes tends to grow too as demand slows, leaving more inventory to sit on the market.
In the week ending March 15, there were 507,000 single-family homes on the market in the U.S., up 1.3% from a week prior, up 22% from a year ago, and up 105% from two years ago, according to data from Altos Research.
About 59,000 new single-family listings hit the market during the week ending March 15, 24% more than the same week in 2023. Meanwhile, the median price of a single-family home was $435,000, up 1.2% from a year ago.
Nearly all markets are showing inventory growth compared to last year, and the gains are expanding every week.
“If mortgage rates continue to rise to 7.5% or all the way to 8% again, we will see a pretty dramatic increase in unsold inventory,” Simonsen wrote on Monday. “But if rates finally fall, let’s say to 6.5% or lower, we’ll see consumers act very quickly and this inventory growth will reverse. Lower rates mean more buyer competition and less unsold inventory.”
