Mortgage prices fell again last week, falling three basis points to an average of 2. 96%, according to Thursday statistics from Freddie Mac‘s PMMS. Rates have now managed to stay within a five basis point range above or below 3% for nearly two months.
Higher mortgage rates historically have signaled a strengthened economy. But this is no ordinary economy: an apprehensive bond market has been keeping a close eye on global macroeconomic trends and Fed policy changes. Such factors have contributed to stagnating mortgage rates around the 3% mark.
“The market is recovering remarkably quickly and as pandemic restrictions continue to lift, economic growth will remain strong over the coming months,” said Sam Khater, Freddie Mac’s Chief Economist. “Despite the stronger market, the housing market is experiencing a downturn in buy application activity because of modestly higher mortgage rates.”
However, Khater noted, it has yet to translate into lower home prices. A shortage of inventory will likely be a problem for years.
May data from Fannie Mae‘s Home Purchase Sentiment Index revealed homebuyers are feeling horribly discouraged from the housing market these days. The HPSI reported that only 35percent of consumers think now is a good time to buy a house, down from 47% in April. And those who believe it’s a poor time to become a homebuyer increased to 56% from 48%.
HousingWire recently spoke with Aditya Udas, managing director in Iron Mountain, concerning the potential for digital transformation of mortgage custodial duties and how Iron Mountain is innovating collateral management.
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According to that same survey, mortgage rate expectations differed in May for potential customers and sellers with survey respondents torn between if mortgage rates will go up or remain the same. Just 6% remained optimistic they will slide back down.
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