30-year fixed mortgage rates fall for first time in five weeks amid banking uncertainties

Yahoo Finance reporter Dani Romero joins the Live show to provide an update on mortgage rates.

Video transcript

SEANA SMITH: Yahoo Finance's Dani Romero is here with more. And, Dani, obviously applications moving to the upside good news here for the housing industry.

DANI ROMERO: Yeah, definitely good news, you know, when you thought that the housing market would get a little easier for the housing market. That really seems to be the story. We saw mortgage applications bounce back up last week as mortgage rates have really been on the downswing.

But checking back at that 30-year fixed mortgage rate today, it is sitting at 6.5%, and that is what Mortgage News Daily says. That's still pretty high. So even if mortgage rates do fall, the monthly payment is still 42% higher than it was last year.

But it also-- you know, this also coincides as bond yields have really plummeted, as investors have really flocked to, you know, safety within these government securities, all amid this Silicon Valley fallout that we've been talking about throughout the show. But, you know, it also has prompted traders to bet whether or not the Federal Reserve will increase interest rates or not at their next policy meeting next week.

But that's a double-edged sword because if the Fed does change its plans, that could provide relief in the mortgage market. But at the same time, that could put pressure on lending conditions when it comes and could crush home-buying activity.

INES FERRÉ: And speaking of lending conditions and mortgage lending conditions in particular, I mean, with these questions that are swirling about the banking sector right now with the fallout that we've seen from SVB and also Credit Suisse, what are you hearing as far as what could happen with mortgage lending going forward?

DANI ROMERO: Well, Lennar said in their earnings call today that there would be no disruption in their lending-- in their lending business. They said that they have little exposure to the regional banks, and so they said that their warehousing mortgages are actually financed through the big heavyweight banks.

And so-- but this also comes when the homebuilder has posted a double beat on their earnings, blowing past analyst expectations. And some perspective that the executives gave actually on this call is that they say that today's higher interest rate environment actually could be the new normal for home buying. And so looking forward to the next quarter, as, you know, we've seen housing starts, building permits pull back nationally, Lennar is actually betting on that because they say that it will provide availability when it comes to labor and materials.

SEANA SMITH: Yeah, their CEO-- their chairman, I should say, saying that they did see a strong economy during the first quarter. Dani Romero, thanks so much.