On the other hand, turkey and pie significantly higher This Thanksgiving season, Americans have something to thank. That is, mortgage interest rates continue to fall.
Borrowing costs were the first to plunge after encouraging inflation data for October revealed that consumer prices rose 7.7% in October.
But don’t celebrate just yet. Many experts still believe that further Fed rate hikes in the coming weeks could bring average mortgage rates back to the 7% range.
“Homebuyers this year have had to contend with volatility in mortgage rates that is nearly three times higher than in a typical year. is very likely to get worse before it starts to improve. describe Realtor.com Chief Economist Daniel Hale said:
“The market is interpreting the October inflation data to mean that the Fed has won. I made it clear that I see it as one battle of a great war.”
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30 year fixed rate mortgage
Freddie Mac reported Wednesday that the average 30-year fixed-rate mortgage has fallen to 6.58%. His 30-year interest rate average last week was 6.61%, and a year ago he was 3.10%.
This lower interest rate could provide a “window of opportunity” for buyers looking to save on their monthly payments, said George Ratiu, manager of economic research at Realtor.com.
“After mortgage rates generally rise throughout 2022, the recent favorable move by buyers is welcome.” describe ratio.
“Median home listing buyers could save more than $100 per month compared to when home prices were over 7% just two weeks ago.”
15 year fixed rate mortgage
average 15 year fixed mortgage It also fell to 5.90% this week from 5.98% last week. At this point a year ago, the 15-year average was 2.42% for him.
Despite lower interest rates, many buyers may still be getting discounts from the housing market.
“Despite the increasing number of homes on the market, long-term housing shortages continue to drive home prices high, and when financing costs are highly volatile, buyers and sellers Matching price expectations can be more difficult,” says Ratiu.
“A cooling in the rental market, with rent growth returning to past levels, could provide hesitant homebuyers with a haven to regroup and perhaps reassess their plans for the New Year. .”
Rent growth has slowed for the ninth straight month, with the median asking rent in the nation’s 50 metropolitan areas dropping to $1,734, according to Realtor.com.
Rapidly slowing market breaks more records
According to Redfin’s latest monthly report, pending sales fell more than 32% year-over-year in October, the biggest drop ever.
And about 60,000 home purchase deals failed. This marks 17.9% of closed deals.
Nearly a quarter of the homes on sale have also dropped in price, double what they did last year.
“The Fed’s actions to curb inflation are slowing the housing market at a pace not seen since the financial crisis.” To tell Chen Zhao, who leads economics research at Redfin, said:
“There are already encouraging signs that inflation has eased and mortgage rates have fallen last week. We may stop lowering prices.”
However, the Federal Reserve has said further rate hikes, although they may not be as aggressive as previous hikes, could push mortgage rates up again.
Mortgage applications continue to rise
Mortgage applications rose another 2.2% from last week, according to the Mortgage Bankers Association (MBA).
“Lower mortgage rates should improve the purchasing power of prospective homebuyers, who have been largely sidelined as mortgage rates have more than doubled over the past year.” To tell MBA Vice President and Deputy Chief Economist Joel Kan said:
Refinancing activity was up 2% from the previous week, but still down 86% from this time last year.
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