Mortgage rates dip toward 7% in slide from 2024 highs

Mortgage rates are tipping toward 7 percent as the market awaits a rebound in buyer interest. 

The daily average 30-year fixed mortgage rate came in at 6.99 percent on May 15, according to a Mortgage News Daily index reported by Redfin — the first time in five weeks that the daily average rate fell under 7 percent, prompted by a softer-than-expected inflation report. 

The weekly Mortgage Bankers Association survey placed the rate at 7.08 percent, slightly above what has been cast as a key threshold, but additional evidence of a continued slide from the 2024 high of 7.24 percent. 

Cooling rates could mean more interest in the mortgage market, coming alongside some declines in home prices. 

For the four weeks ending on May 12, Redfin reported the share of homes on the market with a price drop was 6.3 percent, the highest level since November 2022. That may suggest price growth is slowing down.

Still, affordability concerns abound. For the four-week period, the median sale price was $386,951 and the median asking price was $418,455, up 4.7 percent and 6.6 percent year-over-year, respectively. Both are all-time highs according to Redfin, which has data going back to 2015.

Among the 50 biggest markets, Detroit’s median sale price increased the most, up 18.8 percent year-over-year. Only one of those populous markets, San Antonio, recorded a median sale price decrease, and only by a hair.

The median monthly mortgage payment, meanwhile, was $2,858, a 12.7 percent increase year-over-year. That was only $26 short of Redfin’s all-time high, set two weeks earlier.

Pending home sales for the four-week period fell 4.3 percent annually, the biggest fall in approximately three months. There was also a week-to-week decline, a rarity during the traditional spring home shopping season.

Inventory also remains an issue across the country as owners who secured low mortgage rates during the early days of the pandemic are not willing to let them go. While new listings increased 10 percent year-over-year, they were flat from week-to-week at a time of the year where they usually spike.

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