Another good week for rates. The 30-year fixed rate mortgage dropped a whopping 16 basis points to 5.29% while the 15-year mortgage dropped an impressive 9 basis points to 4.75%.
The tides have finally turned; all the upward momentum from weeks past has finally pushed mortgage rates in the opposite direction. It wasn’t just rate trends that did it though. Weakness in the stock market also played a role in this shift. The big question is whether rates will continue to stay at these levels once stocks and other metrics improve. Speaking of metrics, another influential one this week was new home sales, which fell 16.6% month-over-month. Typically, new home sales aren’t too affected by interest rates. However, April proved to be different, falling way below the forecast of 750K with just 591K new homes sold. This cooling off period is understandable given how fast housing prices have climbed (especially in comparison to wages). The true test of the real estate market will be how sales do once they’ve had a chance to acclimate to changing supply, demand, and prices.