If we took the worst levels of the spreads from 2023 and incorporated those today, mortgage rates would be 0.58% higher right now, Mohtashami wrote. While we are far from being average with the spreads, the fact that we have seen this improvement is a plus this year.
According to HousingWire's Mortgage Rates Center, the 30-year conforming rate peaked at 7.87% at the end of October 2023 but dropped to 6.83% only two months later. More peaks and valleys followed before this year's high-water mark of 7.58% on May 1.
In commentary published Wednesday after the decision, Zillow Home Loans Senior Economist Orphe Divounguy said that mortgage payments on the typical home bought today would cost $100 per month less than one bought in May.
With lower mortgage rates comes a good chance buyers face more competition than they normally would in the fall, when the market usually cools off.
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