Mortgage rates decline for fourth week in a row

Mortgage rates are declining for a fourth straight week, falling to their lowest level since April. The 30-year fixed mortgage rate has fallen below 7% to 6.86%.

Yahoo Finance Reporter Dani Romero joins Wealth! to break down the mortgage rate numbers and what they indicate about the housing market.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Nicholas Jacobino

Video Transcript

Turning now to the housing market.

Mortgage rates are declining for 1/4 straight week.

Here with the numbers we've got, Yahoo Finance is Danny Romero.

Hey, Danny.

Bra.

Mortgage rates fell to their lowest level since early April.

Rates are down for four consecutive weeks.

The average 30 year fixed mortgage rate ticked down to 6.86% as of June 27th, Freddie Mac data shows.

Now.

Despite the pullback in borrowing costs over the past month, rates are still flirting around that 7% level.

Millions of households are locked up into a cheap mortgage, which could be a reason why consumer spending has been so resilient in the face of higher interest rates.

Still, potential home buyers are facing affordability challenges, which is impacting housing activity.

Pending home sales, a leading indicator for the housing sector, fell 2.1% in May, according to the National Association of Realtors.

Now, with a tight house supply, home prices have pushed higher, shrinking the pool of buyers who can afford a home.

Now a household earning $100,000 a year can only afford 37% of home listings today.

Now, how long could it take to unlock the housing market?

Economists at Capital Economics think that mortgage rates would need to fall closer to 5% for supply to start normalising so this housing recovery might take longer than expected, Brad.