By Alex Veiga, associate commercial writer
LOS Angeles (AP) – Mortgage rates have been mainly decreasing in recent weeks, helping to encourage potential house buyers when the spring purchasing season takes place.
But the same factors that have achieved mortgage rates at their lowest level since December – a sign that the American economy slows down and that uncertainty about the potential benefits of Trump administration prices on imports – darkens the prospects for the location of mortgage rates from here.
“We do not provide for significant relief of high mortgage rates in the near future due to the remaining inflation remaining high, which will not be helped by the prices that the Trump administration seems determined to deploy,” said Joel Berner, principal economist at Realtor.com.
The average rate of a mortgage of 30 years in the United States has decreased by six consecutive weeks, from 7.04% in mid-January to 6.76% last week, according to mortgage buyer Freddie Mac. A year earlier, it was on average 6.94%.
The average rate is now at its lowest level since December 19, when it was 6.72%. It fell briefly at a 2 -year hollow last September, but remains more than double the 2.65% low record, the average rate has reached a little over four years.
Mortgage rates are influenced by several factors, in particular the expectations of bond market in the field of future inflation, the global demand for American treasury and interest rate decisions of the federal reserve.
The recent drop in mortgage rates echoes movements in the yield of the treasury at 10 years, which lenders use as a guide for the pricing of real estate loans.
The yield, which was 4.79% in mid-January, has so much succeeded since then, reflecting concerns about the growth of the economy and the potential impact of the Trump administration to impose prices on several of the country’s largest business partners.
Although it can be said that farmers in the bond market finally benefited house buyers by leading to a drop in mortgage rates, the rate trajectory here is far from being certain.
Prices can increase inflation, which could result in higher yields on the Treasury ticket to 10 years, which increases mortgage rates. Indeed, bond investors require higher yields as long as inflation remains high.
And then there is the Fed, which reported a more cautious approach by assessing where inflation is heading and what policies the Trump administration will continue.
Until now, the constant decline in this year’s mortgage rates has not been sufficient to increase home sales. Sales of previously occupied American houses fell in January while the increase in mortgage rates and prices have frozen many buyers of potential houses despite a wider selection of properties on the market.
While waiting for sales of houses, a Belwether for future sales, indicate that potentially additional reductions in sales in the coming months. They slipped to a hollow of all time in January.
However, last week, mortgage requests jumped 20.4% compared to the previous week, according to the Deathgage Bankers Association. And a measure of requests for refinancing real estate loans jumped 37%, said MBA.
Although a collection in mortgage requests is typical of this period of the year, the strong increase is a signal that mortgage rates have dropped enough to stimulate certain fences buyers.
The withdrawal of prices arrives at a good time for house buyers. The inventory of houses on the market has increased sharply compared to a year ago and prices increase more slowly nationally and decrease in many metropolitan regions, such as Austin, Dallas and Tampa, in Florida.
However, more attractive mortgage rates may not be sufficient to motivate house buyers if the economy and the labor market have worsened.
“Inflation is still a problem, but now the economy is starting to show signs of weakness,” said Daryl Fairweather, chief economist of Redfin. “What it means for the housing market is that these two factors make buyers more reluctant to enter the market.”
Originally published:
California Daily Newspapers
