WASHINGTON – Freddie Mac has reported that the average rate for a 30-year fixed mortgage has fallen for the third consecutive week, reaching 7.44%, the lowest level in eight weeks. This decline to levels not seen since the 7.31% rate comes as a potential boon for homebuyers facing high prices amidst a tight housing supply.
The reduction in mortgage rates is significant against the backdrop of a housing market that has seen sales of previously occupied U.S. homes slow for four months straight as of September, hitting a pace not seen in over ten years. Homeowners who locked in near 3% rates are now reluctant to move and take on mortgages nearly double that rate, which contributes to the ongoing housing shortage.
Despite this trend, Freddie Mac’s chief economist, Sam Khater, remains optimistic. He suggests that sustained economic strength, coupled with lower inflation and the recent dip in mortgage rates, could entice more potential buyers into the market.
The average rate on 15-year fixed-rate mortgages also declined this week to 6.76% from 6.81%. This comes as the yield on the 10-year Treasury note—a benchmark used by lenders to price loans—decreased to 4.47% from 4.54%. Just three weeks ago, the average rate on a 30-year home loan hit a peak of 7.79%, which was the highest since late 2000.
These mortgage rates are significantly influenced by the Federal Reserve’s stance on interest rates, investors’ expectations for future inflation, and global demand for U.S. Treasurys. In fact, last month saw the yield on the 10-year Treasury reach its highest point since 2007, climbing above 5%.
Adding to the positive signs for potential homebuyers is the report from the Mortgage Bankers Association for the week ended November 10, which noted a considerable uptick in mortgage loan applications as rates declined—a signal of a potentially reinvigorating market.
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