The question homebuyers and real estate agents are asking is: Where will mortgage rates go now?
For the week, 30-year fixed mortgage rates fell from 4.55% to 4.44%, according to the BankingMyway.com Weekly Mortgage Rate tracker.
Fifteen-year fixed-rate mortgages also fell, from 3.77% to 3.61%, while five-year adjustable rate mortgages slid from 3.38% to 3.23%.
Economists say rates have fallen over hints from the Federal Reserve that it might ease up on its mortgage bond purchase program, which has helped keep mortgage rates low.
Fannie Mae (FNMA_) offers some guidance on the issue with its June National Housing Survey.
In it, Fannie Mae surveyed 1,000 Americans on their views on homeownership, home prices and mortgage rates. In the survey, 57% respondents expect mortgage rates to rise over the next 12 months -- that's up from 46% in the May survey, and it's the highest number in the three-year history of the survey.
In addition, 57% of survey respondents expect home prices to rise, with 72% of Americans saying it's a good time to buy a home.
In a way, FNMA says, potential homebuyers are in a race to buy a home before mortgage rates and home prices rise too high.
"The spike in mortgage rate expectations this month seems to have had an impact on a number of the survey's indicators and may increase housing activity in the near term by driving urgency to buy," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Consumers may recognize that today's still-favorable mortgage rates and homeownership affordability levels will recede over time. Given rising home and rental price expectations and improving personal financial attitudes, more prospective homebuyers may be deciding that now is the time to get off the fence."
Fannie Mae provides some additional consumer sentiments related to the housing sector, and the economy in general:
46% of Americans say their personal financial situation will improve over the next year -- the highest level since 2010.
26% of Americans report their household income is up -- a 6% rise from last year.
47% of respondents say it would "easy" for them to get a mortgage this year.
Clearly, the FNMA survey indicates Americans are more bullish on the economy, and on their own personal financial situation. That said, many respondents seem to think the economy is in a "sweet spot" right now, with home prices and mortgage rates at reasonable levels.
Americans expect home prices and mortgage rates to trend higher, as the housing market moves out of that sweet spot, and into more expensive territory.
Source: The street