Mortgage rates are falling back near 6%, reopening the housing market for 3 million home buyers, according to Freddie Mac
Mortgage rates are falling back near 6%, and that could help reopen the housing market to about 3 million buyers who were priced, according to Freddie Mac.
The government-sponsored enterprise said that the average 30-year fixed-rate mortgage inched lower to 6.09% on Thursday, notching its fourth-straight week of declines. That’s the lowest rates have been since peaking at over 7% in November of last year, Freddie Mac chief economist Sam Khater said in a statement.
“This one percentage point reduction in rates can allow as many as three million more mortgage-ready consumers to qualify and afford a $400,000 loan, which is the median home price,” Khater added.
Mortgage rates skyrocketed over the course of 2022, influenced by the Federal Reserve’s rate hikes aimed at taking some heat out of the economy.
From the MPA:
Long-term US mortgage rates slipped following the Federal Reserve’s slowdown in its monetary policy tightening.
The 30-year fixed-rate mortgage hit a low of 6.09% this week, according to Freddie Mac’s Primary Mortgage Market Survey. That’s down from 6.13% a week ago and nearly a full point drop from November’s peak of over 7%, providing a boost for mortgage-ready homebuyers.
“According to Freddie Mac research, this one percentage point reduction in rates can allow as many as three million more mortgage-ready consumers to qualify and afford a $400,000 loan, which is the median home price,” Freddie Mac chief economist Sam Khater said.
The average rate on the 30-year fixed rate mortgage has fallen to 5.99%, according to Mortgage News Daily.
The housing market hasn’t seen the rate with a five handle since a brief blip in early September. Before that, it was in early August.
The rate started this week at 6.21% and fell sharply Wednesday after Federal Reserve Chairman Jerome Powell said inflation “has eased somewhat but remains elevated,” which was a shift from previous language.
That sent bond yields lower, and mortgage rates loosely follow the yield on the 10-year Treasury.
“Measured steps can continue as long as the economic and inflation data is there to support them. This means rates can make progress down into the 5′s but are unlikely to stampede quickly into the 4′s,” said Matthew Graham, chief operating officer at Mortgage News Daily. “I’m not saying that won’t happen–just that it would take a bit more time than some of the rate rallies we remember from the past.”