Quintessential Mortgage Group, LLC
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Mortgage Rates Have Reached Highest levels this year & could still increase

February 10th, 2024

Arial view of houses

What are we seeing from today’s rates?

The 30-year fixed mortgage rate, a favorite among homebuyers, surpassed 7% on April 1 and has continued to climb, now hovering around 7.5% as reported by Mortgage News Daily and has continued to climb. This marks its highest point since mid-November of the previous year.

Last October, rates soared to levels not seen in decades, leading to a slowdown in home sales. Builders responded by offering incentives to offset higher rates, outperforming existing home sellers.

However, rates dipped into the mid-6% range by mid-January, sparking a surge in home purchases. This trend reversed in mid-February due to concerns about rising inflation, prompting rates to climb once more.

Danielle Hale, chief economist for Realtor.com, noted, “A resurgence in inflation expectations by mid-February pushed mortgage rates higher, a trend reinforced by recent data and statements from Fed Chair Jerome Powell. The impact of these elevated rates is likely to be reflected in upcoming sales figures.”

Despite the rate hike, mortgage applications for home purchases increased by 5% compared to the previous week, as reported by the Mortgage Bankers Association. However, demand remains 10% below levels seen a year ago, even with rates now 70 basis points higher.

What economist are saying

Joel Kan, MBA’s chief economist, commented, “Despite the rate increase, application activity rose, possibly due to some borrowers acting preemptively in anticipation of further rate hikes.”

This uptick may be short-lived as affordability continues to erode. Although there is more inventory available compared to a year ago, it remains historically low. Consequently, homes are selling faster amidst heightened competition. Those holding out for a significant drop in rates may need to wait longer as reported by the  Mortgage Bankers Association’s composite index.

Bob Broeksmit, MBA’s president and CEO, emphasized, “Recent economic indicators signal a robust economy and job market, likely maintaining mortgage rates at their current elevated levels in the near term.” While there’s much uncertainty and it’s impossible to time the market, our loan experts at QMG can help answer any question you might have and work with your mortgage needs. 

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