The average rate for a 30-year, fixed home loan dropped to 6.28% last week from 6.73% during the first week of March, and according to Lawrence Yun, chief economist for the National Association of Realtors, every half percentage point drop in mortgage rates equates to an additional 200,000 home sales. Rates are expected to hover around 6.3% in the second quarter of 2023 and 5.9% in the third quarter, meaning that not only will new buyers be able to make their debut in the for-sale market, but those waiting on the margins will wage a comeback amid more affordable borrowing costs, Forbes reports.
Typically, 40% of U.S. home sales go under contract from April to June, and though the spring homebuying season is off to a sluggish start, falling interest rates could lead to more active home sales in the months ahead.
“Whenever there is unrest in the markets, mortgage rates tend to drop – especially with the Federal Reserve committed to fighting inflation,” said John Hardesty, general manager of the mortgage division at Argyle, a payroll data verification platform used by lenders. “We’re seeing some settling in mortgage rates, and it’s the perfect time for that.”
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