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Lower mortgage rates are luring some home buyers back

The daily average mortgage rate topped 7% a week ago last Wednesday and hit a four-month high. However, the banking crisis that has unfolded in the United States has contributed to reducing the interest rate on mortgages. The daily average for the 30-year fixed-rate mortgage ended this week at 6.55%, half a point below the March 8 peak.

“Buyers pounced when prices fell because they are so volatile right now, which shows that there are many people waiting for the right time to enter the market, says Redfin Economics Research Lead Chen Zhao. “Where mortgage rates go from here depends largely on how the Fed responds to chaos in the banking industry in the United States and abroad, along with stubbornly high inflation.”[ads1];

While the lower prices make it cheaper to buy a home and prices fall, the average mortgage payment is still almost a quarter more than last year. And despite home buyers rushing to get a lower interest rate, overall demand in the market remains weak. Pending home sales are down 17% compared to 12 months ago, the biggest drop in six weeks.