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Mortgage Rates Decline for Sixth Week: Freddie Mac
By Leslie Cook MONEY RESEARCH COLLECTIVE
The 30-year fixed-rate mortgage is now averaging 6.27%, according to Freddie Mac.
Mortgage rates are lower for the sixth week in a row.
The 30-year fixed-rate mortgage is now averaging 6.27%, according to Freddie Mac, a decrease of 0.04 percentage points over the previous week. With today’s decrease, the 30-year rate is at its lowest point since mid-September. The average rate on a 15-year fixed-rate loan, on the other hand, moved higher to 5.69%.
“Heading into the holidays, mortgage rates continued to move down,” said Sam Khater, Freddie Mac’s chief economist, in a statement. “Rates have declined significantly over the past six weeks, which is helpful for potential homebuyers.
The recent decline in mortgage rates gave homebuyers a little bit of breathing room in terms of affordability.
The national median mortgage payment for borrowers applying for loans in November decreased to $1,977, according to the Mortgage Bankers Association’s Purchase Applications Payment Index. This represents a decrease of 1.8% from October when the median monthly payment was $2,012.
“MBA expects both mortgage rates and home-price growth to moderate, which may encourage additional buyers to return to the housing market in the coming months,” said Edward Seiler, MBA’s associate vice president of housing economics, in a statement.
The mortgage rate slide continues as a recession appears more likely
Today’s slightly lower rates came as the market turns its focus to 2023.
“Investors increasingly appear to be gauging the likelihood of a recession coming in the next year,” said Matthew Speakman, senior economist at Zillow Home Loans, in a statement. “Recent weakness in retail sales figures stoked some of these concerns.”
Speakman was referring to a release by the Commerce Department last Thursday showing that retail sales for the month of November were down by 0.6% month-over-month, much weaker than the 0.1% slowdown that had been anticipated.
Despite indications that inflation may be on the decline, many economists believe there is a 70% chance of a recession occurring in 2023 as the effect of the Federal Reserve’s rate hikes continue to take effect and the economy shows more signs of a slowdown.
Today’s downward movement in rates could be indicative of a long-term trend or merely part of the typical volatility seen at year’s end, notes Speakman.
“It’s likely that a more substantive move in mortgage rates won’t occur until early January, when the next read on a key inflation gauge is due,” he added.