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Mortgage Rates Hit Below 7% before the Spring Homebuying Season Across Several States

Mortgage Rates Hit Below 7% before the Spring Homebuying Season Across Several States

The average 30-year fixed mortgage rate has dropped below 7% for the first time since early April, reaching 6.94% from 7.02% a week ago, as reported by Freddie Mac. Rates have continued to decline for the third consecutive week, remaining steady at around 7% for over a month.

The daily rate movement measure experienced fluctuations between 7% and 7.20% over the past week, ultimately settling at 7.17% on Thursday, as reported by Mortgage News Daily.

This year, the spring homebuying season has been unusually sluggish, despite typically being the busiest time for the housing market. Homebuyers are facing challenges due to elevated mortgage rates, high home prices, and low inventory. Home sales declined in April due to a limited supply of available properties.

“Having significant volume becomes challenging when interest rates are high and the inventory is relatively low compared to historical levels,” explained Corey Burr, the founder of The Burr Group, a real estate agency based in Washington D.C., in an interview with Yahoo Finance.

Despite strong demand for homes, potential buyers remain cautious about entering the market, even following the recent decrease in interest rates. The Mortgage Bankers Association (MBA) reported a 1% decrease in the volume of purchase mortgage applications this week compared to the previous week.

Mortgage applications have seen an 11% decrease compared to the corresponding week last year. Despite this, there was a significant increase in refinance activity, with a 7% weekly jump and a 21% surge compared to last year.

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