With “recession” on everyone’s minds, rates took a major step back. The 30-year fixed rate mortgage dropped 17 basis points to 5.55% while the 15-year mortgage dropped 19 basis points to 4.78%.
Fears of a recession at home and abroad have pushed bond yields lower. Overall, though, rates are still in a sideways pattern and are unlikely to break out of their current range unless today’s Federal Reserve meeting proves eventful. So far, expectations are holding that the Fed will implement a 75 basis point rate hike, and that Q2 GDP will be slightly positive at 0.5%. In real estate-related news, new home sales fell in June on both a monthly (8.1%) and annual (17.4%) basis, particularly in the West where sales were down 36.7%. In reaction, builders like Pulte Group have begun offering incentives in the form of lot premiums and mortgage support. The only region to show improvement was the Midwest, which had an astounding 42.3% growth in new home sales.