In November, Mortgage rates peaked at 7.08%. Now they continue to drop which marks the biggest three-week decrease in over 14 years.
“Mortgage rates continued to drop this week as optimism grows around the prospect that the Federal Reserve will slow its pace of rate hikes,” says Freddie Mac chief economist Sam Khater.
A 6.49% rate is what the average 30-year fixed-rate mortgage dropped to. The week prior it was down from 6.58% according to the Freddie Mac report. The 30-year rateaveraged 3.11%, a year ago.
“Data shows that mortgage rates may have peaked. After surpassing the 7% threshold in the second week of November, rates are finally moving down as inflation is cooling,” explains Nadia Evangelou, senior economist for the National Association of Realtors.
From 5.90% last week, the average 15-year fixed home loan dipped to 5.76% this week. The 15-year rate was at 2.39%, one year ago.
But while the reprieve in soaring mortgage rates may be “welcome news,” housing costs in 2023 are still expected to remain elevated, warns George Ratiu, manager of economic research at Realtor.com.
Most homebuyers are still priced out of purchasing, due to volatile markets and a yearning for better rates. Mortgage applications are still declining, which matches the high rates as we end 2022 and look to 2023 for better prices and strategy.
Here’s the Valuetainment clip on Mortgage rates:
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