Recession fears have sent money pouring into bonds which caused the biggest drop in mortgage rates since 2008, according to the Freddie Mac weekly survey…(Freddie Mac)
- The 30-YR Fixed dropped 40 basis points to 5.30%, this is 240 basis points higher than one year ago.
- The 15-YR FIXED fell 38 basis points to 4.45%, this is 225 basis points higher than one year ago.
Sam Khater, Freddie Mac’s Chief Economist, said “While the drop provides minor relief to buyers, the housing market will continue to normalize if home price growth materially slows due to the combination of low housing affordability and an expected economic slowdown.” With affordability at a 40-year low a half a point drop in rate is nice, but it won’t be much help unless home prices stagnate and quick. Until wages rise or home prices level off mortgage rates will have little impact on overall housing demand.