Mortgage rates drop for 4th week amid anxiety over economy

Mortgage rates in the U.S. fell for a fourth straight week, dropping to the lowest rate since early May.

The average for 30-year, fixed loans was 6.77%, down from 6.81% last week, Freddie Mac said in a statement. The 15-year, fixed loan — popular among refinancers — was 5.89%, down from 5.82% the previous week.

The stretch of declines offers a bit of relief to house hunters looking to take advantage of a wider selection of listings across much of the country. But while buyers have gotten more choices and greater negotiating power, affordability remains a hurdle. At the same time, anxiety over the economy may weigh on consumers’ financial decisions.

As the housing market tilts more in buyers’ favor, there’s evidence that some would-be sellers are getting cold feet. In the four weeks through June 22, new listings decreased from a year earlier in 20 of the country’s 50 most-populous metro areas, according to Redfin Corp. In the same period, purchase contracts slid 2.3%, the biggest drop in three months.

While mortgage rates are down from recent highs, they’re still stubbornly close to 7%, and many economists say prospective buyers need more incentives.

“Slightly lower mortgage rates toward the end of the year could further improve affordability, but significant improvements appear unlikely,” said Kara Ng, senior economist at Zillow Home Loans. “Still, home shoppers have some advantages — plenty of options have given them more bargaining power than in any spring in at least seven years.”

Meanwhile, metro Detroit surged to again be near the top in the nation for home price appreciation.

The monthly S&P CoreLogic Case-Shiller Indices released this week shows that home prices in metro Detroit in April were up 5.5% from a year earlier, far outpacing the country as a whole (2.7%) and trailing just the New York City (7.9%) and Chicago (6%) metro areas, per the report.

And in May, metro Detroit home sales heated up with more listings, sales and higher prices.

— Crain’s Detroit Business contributed to this report.