Mortgage rates fell for the second straight week, but they continue to remain above 6.5%. According to Freddie Mac, the average rate on a 30-year fixed mortgage ticked down to 6.69% from 6.71% the previous week. In the meantime, two of the main factors driving today’s mortgage market have become more favorable. Inflation dropped to 4%, and the Federal Reserve paused its interest rate hikes after raising rates for more than a year. Data also indicates that inflation may ease even faster in the following months. The latest release shows that CPI rent growth has already peaked and started to cool. With this decelerating trend in rent prices to persist in the upcoming months – following the trend of asking rent prices reported by the private sector – inflation will slow down further, pulling down mortgage rates.
At the current mortgage rate, renters who pay $1,655 monthly for rent can spend the same amount on a monthly mortgage payment for a home with a value of $321,000.