Estimated read time: 2-3 minutes
- Mortgage rates decreased slightly to 6.89% but face potential volatility.
- Experts cite economic data, Fed's tone, and policy changes as influencing factors.
- Stable rates reflect latent demand, but uncertainty remains for homebuyers.
SALT LAKE CITY — Mortgage rates fell slightly last week, but some experts warn there's uncertainty ahead.
The average for a 30-year fixed-rate mortgage in the United States decreased to 6.89% as of Thursday, according to Freddie Mac's survey results, a 0.06 drop from the previous week.
That number had climbed above 7% in mid-January for the first time in eight months.
What that means for would-be homebuyers is not clear. Here's how the new numbers are being seen:
- By Freddie Mac: "Mortgage rates have been stable over the last month and incoming data suggest the economy remains on firm footing. Even though rates are higher compared to last year, the last two weeks of purchase applications are modestly above what was seen a year ago, indicating some latent demand in the market."
- By Redfin: "While mortgage rates have fallen slightly in recent weeks, they are likely to remain high and at risk of significant volatility. Surprising economic data, changes in the Fed's tone, and new policy announcements from the White House could all cause mortgage rates to increase or decrease quickly.
- By Realtor.com: "Rates remained stubbornly high in recent weeks as markets adjusted to the seemingly ever-changing economic environment. The recent announcement of, then pause in, tariffs had the potential to jostle market confidence, which could have negatively affected mortgage rates, but the timing managed to keep things rather uneventful."
The references to President Donald Trump's actions since taking office Jan. 20 include his announcement that tariffs would be imposed as of Tuesday on Canada, Mexico and China. That was quickly followed by a pause on his tariff plans for Canada and Mexico after deals were reached.
The Federal Reserve voted late last month to leave the benchmark interest rate unchanged.
Chen Zhao, the leader of Redfin's economics team, cited the January jobs report in her analysis. While the nation's unemployment rate unexpectedly declined from 4.1% to 4.0%, job growth wasn't as robust as anticipated.
She called the 143,000 jobs added in January "a slightly disappointing number" compared to the 170,000 expected and suggested the deadly wildfires in Los Angeles may have adversely affected the numbers.
"The January jobs report was a mixed bag, but generally pointed to a stronger-than-expected labor market," she said. "Mortgage rates may see a little bounce off this data, but not much, as the Fed will continue to be expected to hold cuts until mid year."
