Key facts
- 30-year conforming mortgage rates averaged 7.38% on Tuesday.
- Purchase mortgage activity is 18% below last year's pace.
- 90.6% of traders predict the Fed will hold rates steady.
- An executive order aims to lower mortgage insurance premiums and boost manufactured housing.
Mortgage rates have fallen for three consecutive weeks, with 30-year conforming loans averaging 7.38% on Tuesday. This decline comes ahead of an anticipated Federal Reserve rate pause, though rates remain high enough to suppress housing demand. The Mortgage Bankers Association noted that purchase activity is down 18% year-over-year, with applications falling for seven straight weeks. Federal Housing Administration (FHA) and jumbo loan rates also saw shifts, averaging 7.24% and 7.69% respectively. Traders overwhelmingly expect the Fed to hold rates steady at its upcoming meeting, influenced by recent jobs data. However, some economists caution that rising inflation expectations could still lead to further rate hikes, prolonging the period of elevated borrowing costs for homebuyers.