Weekly Mortgage Rates Fall, While Affordability Remains Elusive

This article was first published on NerdWallet.com.

Mortgage rates fell for the first time since March on news that the economy is cooling down.

The average rate on the 30-year fixed-rate mortgage fell to 7.03% in the week ending May 9, according to rates provided to NerdWallet by Zillow. It was a decrease of 29 basis points from the previous week. (A basis point is one one-hundredth of a percentage point.)

Slower job growth leads the way

It was a welcome decline. The 30-year mortgage rate had gone up five weeks in a row, throughout April and the beginning of May. Rates dropped after the May 3 release of the April jobs report, in which the Labor Department announced that the economy grew by 175,000 jobs. Forecasters had expected a bigger number.

"Mortgage rates decreased this week as labor market and housing data continue to point to a slowdown ahead," said Orphe Divounguy, senior economist for Zillow Home Loans, in a news release. He said investors are convinced that the Federal Reserve will cut short-term rates later this year as inflation subsides. That conviction helped to push mortgage rates down this week.

It's hard to afford a house

Although mortgage rates fell this week, they're higher than a year ago. House prices have...