For most of last year, there was an assumption that mortgage rates were about to fall. And they did, briefly. In late summer, average rates started to decrease and ended their slide in mid-September about a point lower than they were. But unfortunately for prospective home buyers and refi-ready homeowners, lower rates only lasted a week or two before they began climbing back up. Now, according to the latest results from Fannie Mae’s Home Purchase Sentiment Index, Americans have begun to look past an expected rate drop. In fact, the number of respondents who said they expect rates to fall over the next year slipped 5 percent from the month before, while the share who say rates will stay the same is up 3 percent. Mark Palim, Fannie Mae’s senior vice president and chief economist, says Americans are acclimating to elevated rates but it has affected home buying sentiment. “In February, the HPSI saw its first year-over-year decline in nearly two years, which was mostly due to a shrinking share of consumers expressing optimism about the direction of mortgage rates,” Palim said. (source)
