Freddie Mac, a leading mortgage giant, reported a seventh consecutive weekly decline, with the average interest rate on a new 30-year fixed mortgage dropping to 6.95% from the previous week’s 7.03%.
Mortgage rates fell below 7%, marking the first instance since the summer, providing a glimmer of hope for prospective homebuyers looking for increased affordability
This consistent descent follows a peak of 7.79% in October, the highest in 23 years, and now rests at the lowest point since early August. While current mortgage rates fell remain double those from two years ago, the recent downward trajectory offers a somewhat alleviating factor for those navigating the challenging intersection of high borrowing costs and soaring property prices. The monthly cost of financing a $400,000 home has seen a reduction of $183 to $2,188 in less than two months, assuming a 20% down payment.
Freddie Mac‘s chief economist, Sam Khater, expressed optimism, stating, “We likely will see a gradual thawing of the housing market in the new year.” Freddie Mac, renowned for gauging prevailing interest rates, serves as a reliable indicator.
Redfin’s Homebuyer Demand Index, measuring requests for home tours and real estate services, has risen by 3% in the past month
Concurrently, mortgage applications have experienced a modest uptick, as reported by the Mortgage Bankers Association. The mortgage rates fell aligns with indications of diminishing inflation. The Federal Reserve’s recent signal that inflation is unlikely to warrant additional increases to its benchmark interest rate has contributed to the ongoing decrease in mortgage rates.
In summary, the consistent mortgage rates fell below 7% signifies a potential turning point for the housing market, fostering optimism among buyers as affordability sees a welcome improvement.
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