How will housing market be impacted by recent Bank Failures?

Mortgage rates tumbled Monday in the wake of Silicon Valley Bank’s collapse that has rattled markets.

The average 30-year mortgage rate dropped to 6.57% on Monday, according to the latest Mortgage News Daily quote. That’s down from 6.76% on Friday when SVB failed and 7% on Thursday when the bank’s stock got hammered. The rate tracks the 10-year Treasury yield, which has fallen around 30 basis points since Wednesday's close as investors bet the unfolding chaos could persuade the Federal Reserve to slow its interest-rate hiking campaign.

The unexpected drop in rates could offer an opening for price-strained homebuyers and homeowners who have been waiting for an opportunity to lock in a lower rate, but housing experts remain uncertain how long the dip will last.

“There's still a lot of uncertainty but in the near term, I do expect mortgage rates to drop,” Daryl Fairweather, chief economist at Redfin, told Yahoo Finance. “And I expect buyers to take advantage of those mortgage rates because we've seen buyers be incredibly sensitive to those interest rates.”

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