Mortgage rates fall to lowest level in over 2 months
Published On Feb 27, 2025, 12:13 PM
Freddie Mac reported that the average rate on a 30-year fixed mortgage has decreased to 6.76%, marking the sixth consecutive week of decline and the lowest rate seen in over two months. This is down from 6.85% last week and significantly lower than 6.94% a year ago. The drop in rates, along with slight improvements in housing inventory, suggests an increase in consumer interest in home buying. Meanwhile, the 15-year fixed mortgage rate also fell to 5.94%. Despite the optimistic signals, high home prices and lingering affordability issues remain challenges for potential buyers, particularly as pending home sales have hit record lows due to a tough combination of high mortgage rates and property prices.
Stock Forecasts
XHB
Positive
As lower mortgage rates typically boost demand in the housing market, we may see improved sales activity leading to growth in certain ETFs related to real estate or home-building.
SPY
Negative
The decrease in mortgage rates does not alleviate high home prices, which could continue to press against affordability, potentially slowing down housing demand in the longer term.
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