New York: According to Mortgage News Daily, the average rate for a 30-year fixed mortgage fell to 6.57% on Monday, down from 6.76% on Friday and a recent high of 7.05% on Wednesday.
The drop in mortgage rates is connected to the decline in the yield on the 10-year Treasury, which reached a one-month low due to the failures of Silicon Valley Bank and Signature Bank, causing a ripple effect across the banking sector.
For a buyer interested in a $500,000 home with a 20% down payment on a 30-year fixed mortgage, the monthly payment is now $128 less than it was last week. However, it is still higher than it was in January.
This decrease in mortgage rates could potentially lead to increased home sales in the spring housing market, but agents and builders reported a significant slowdown in February as rates increased.
The Federal Reserve's monetary policy and thoughts on inflation also heavily influence mortgage rates.
Recently, Federal Reserve Chairman Jerome Powell stated that the latest economic data showed stronger-than-expected results, and the Fed would be prepared to increase the pace of rate hikes if data indicated faster tightening was necessary.
With inflation still a concern, the impact of consumer fear may continue to drive market behavior.
