“The decline in mortgage rates has stalled due to a mix of escalating geopolitical tensions and a rebound in short-term rates that indicate the market’s enthusiasm on rate cuts was premature,” Khater said.
Despite the recent rise in rates, optimism remains. Bob Broeksmit, president and CEO of the Mortgage Bankers Association, noted that the current mortgage rates, although up slightly, are still down significantly from the opening months of 2024.
“Mortgage rates increased slightly last week for the first time in two months but remain much lower than earlier this year,” said Broeksmit. “These lower mortgage rates – along with rising inventory levels – are giving potential buyers more confidence to enter the market. Purchase activity increased last week and was up more than 9% from one year ago.”
Khater also noted that the broader market conditions remain favorable for homebuyers.
“Zooming out to the bigger picture, mortgage rates have declined one and a half percentage points over the last 12 months, home price growth is slowing, inventory is increasing, and incomes continue to rise,” he said in the latest PMMS report. “As a result, the backdrop for homebuyers this fall is improving and should continue through the rest of the year.”