Buyers may find some relief in housing costs after rates fall back below 7%, but “there’s still a long way to go for the housing market,” said Freddie Mac.
The average 30-year mortgage rate fell last week after hitting a record high, which could signal inflation has peaked, according to Freddie Mac.
The average rate for a 30-year fixed-rate mortgage fell to 6.61% for the week ending November 17, according to Freddie Mac Core Mortgage Market Survey. This was a decrease from the the previous week while it was on average 7.08%, it nevertheless remains significantly higher than last year at the same time, when it was 3.10%.
The 15-year mortgage was 5.98% last week, down from 6.38% the week before and 2.39% last year.
“Mortgage rates fell this week on incoming data that suggests inflation may have peaked. While the decline in mortgage rates is good news, there is still a long way to go for the market. housing,” said Sam Khater, chief economist at Freddie Mac. “Inflation remains high, the Federal Reserve is expected to keep interest rates high, and consumers will continue to feel the impact.”
The Consumer price indexa measure of inflation, rose 7.7% a year in October, a slowdown from the 8.2% increase in September. This is the lowest annual increase since the start of 2022, according to the last report from the Bureau of Labor Statistics (BLS).
Freddie Mac also announced several changes to how it will publish mortgage rates, which were put in place last Thursday. As part of the reporting changes, the mortgage agency will no longer publish fees, points or adjustable rates.
“This new approach will incorporate more detailed data and more closely monitor real-time mortgage rates,” Khater said.
If you want to take advantage of lower mortgage rates, you can consider refinancing your loan to lower your monthly payment. You can visit Credible to find your personalized interest rate without affecting your credit score.
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Falling mortgage rates are a relief for homebuyers
Over the past few months, homebuyers have had to navigate an unattractive housing market characterized by record high mortgage rates and still high house prices. The rate cut gives homebuyers “a lot more buying power than they had last week,” Redfin said.
“Serious buyers who need to buy a home as soon as possible can feel good about jumping on a house…knowing that it could cost them up to $100 less per month than the same house would have cost if they had signed the deal a week earlier,” Taylor Marr, deputy chief economist at Redfin, said in a press release.
However, Marr said rates were still more than double what they were a year ago.
“More casual buyers may want to wait a few more months, as there is reason to be cautiously optimistic that the worst of inflation and high rates are behind us and monthly payments could fall further,” Marr continued.
If you’re interested in taking advantage of lower mortgage rates, you might consider refinancing your home loan. You can visit Credible to compare several mortgage lenders at once and choose the one with the best interest rate for you..
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Housing market not out of the woods yet, economist says
Lower mortgage rates could confuse a housing market that was getting used to inflation and rising rates as the status quo, according to George Ratiu, senior economist at Realtor.com.
“The high volatility in mortgage rates is causing a high degree of uncertainty for buyers and sellers in today’s market,” Ratiu said. said in a press release.
Sellers have started to accept that house prices have to come down for buyers to afford them. Realtor.com’s October Inventory Report showed that 21% of listings saw price drops, Ratiu said.
And buyers who are buoyed by last week’s rate cut could sit on the sidelines, hoping for rates to drop even lower, Ratiu said.
“However, with inflation still north of 7% and the Fed committed to continue raising the funds rate over the next few months, the mortgage market is not out of the woods,” Ratiu said. . “We could still see rates rebound above 7% before the end of the year.”
If you think you’re ready to shop around for a mortgage, you can use the Credible marketplace to help you easily compare interest rates from multiple mortgage lenders and get pre-qualified in minutes.
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