15 Feb An update on Minnesota mortgage interest rates
An update on Minnesota mortgage interest rates
The interest rates have been slowly decreasing over the last few months from a high of 8 percent. But US mortgage rates jumped higher today following news of strong employment and inflation reports.
The 30-year fixed-rate mortgage averaged 6.77% in the week ending February 15, and that is up from 6.64% the previous week, according to data from Freddie Mac. I know of a lender who has much better pricing than that but that is the national average.
“The economy has been performing well so far this year and rates may stay higher for longer, potentially slowing the spring homebuying season,” said Sam Khater, Freddie Mac’s chief economist. “Mortgage applications to buy a home so far in 2024 are down in more than half of all states compared to a year earlier” Khater also said.
Why is this? Because the labor market added 353,000 jobs in January, far more than expected according to the latest monthly employment snapshot from the Labor Department and the economy is still hot with inflation coming in slightly higher than predicted at 3.1% this week. That is still substantially lower than 6.4% for the same time last year.
The reason the rates went up is because the market thought the Federal Reserve would lower interest rates by .25 basis points next month. Now that will not happen. But the Federal Reserve still is committed to having three .25 basis point interest rate decreases this year.
Buyers are taking advantage of these rates because it limits the numbers of buyers in the market and multiple offers and the intense overbidding. These buyers will just do a simple low-cost refinance in 12 to 18 months.
Look for more articles in the future on the state of Minnesota Real Estate. Let Jeff’s over 30 years of real estate make a difference for you!
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