Mortgage rates inch down but stay over 7%, with home-buying sentiment at a record low

By Aarthi Swaminathan

30-year mortgage rate falls 13 basis points, Freddie Mac data shows

Mortgage rates fell for the first time in six weeks, as the U.S. job market showed signs of slowing.

But with rates still firmly over 7%, home-buying sentiment remains at a record low.

The 30-year fixed-rate mortgage fell and averaged 7.09% as of May 9, according to data released by Freddie Mac (FMCC) on Thursday.

That's down 13 basis points from the previous week. One basis point is equal to one hundredth of a percentage point.

A year ago, the 30-year rate was averaging 6.35%.

The average rate on the 15-year mortgage was 6.38%, down from 6.47% last week. The 15-year rate was at 5.75% a year ago.

Freddie Mac's weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage.

Separate data by Mortgage News Daily said that the 30-year fixed-rate mortgage was averaging 7.2% as of Thursday afternoon. The Mortgage Bankers Association's survey said that the 30-year was at 7.18% as of May 3.

The big picture: Despite dropping, the 30-year mortgage rate remains firmly over 7%, which continues to be an obstacle for home buyers, who also have to contend with rising home prices.

As a result, home-buying sentiment plummeted last year and remains at a record low, according to a new poll from Gallup, which surveyed 1,001 respondents in April.

In the poll, 76% of respondents said it's a bad time to buy a house, a figure that was unchanged from last year and remains the worst on record since Gallup began its survey in 1978.

What Freddie Mac said: "An environment where rates continue to hover above 7% impacts both sellers and buyers," Sam Khater, chief economist at Freddie Mac, said in a statement.

"Many potential sellers remain hesitant to list their home and part with lower mortgage rates from years prior, adversely impacting supply and keeping house prices elevated," he added.

Hence, "these elevated house prices add to the overall affordability challenges that potential buyers face in this high-rate environment," Khater said.

-Aarthi Swaminathan

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

05-09-24 1203ET

Copyright (c) 2024 Dow Jones & Company, Inc.