Mortgage rates continue to plummet from their November peak of 7.08%, recording their biggest three-week drop in 14 years.
“Mortgage rates continued to fall this week as optimism increased over the prospect of the Fed slowing rate hikes,” he said. To tell Sam Cater, chief economist at Freddie Mac.
That said, mortgage application activity has fallen again as many homebuyers are still taking prices out of the market and wary of a volatile economy.
“Even with lower interest rates and softer home prices, economic uncertainty continues to limit homebuyer demand as we enter the final month of the year,” Khater said.
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Mortgage interest rates this week
30 year fixed rate mortgage
Average interest rates on 30-year fixed-rate mortgages fell to 6.49% from 6.58% last week, Freddie Mac reported Thursday. A year ago, the 30-year rate averaged 3.11%.
Mortgage rates began to fall below 7% after the latest inflation data was released in mid-November. The consumer price index was 7.7%, below economists’ expectations.
“The data show that mortgage rates may have peaked. is declining dramatically.” describe Nadia Evangelou, senior economist at the National Association of Realtors, said:
Evangelou believes rates could stabilize at 6% if inflation continues to slow.
15 year fixed rate mortgage
Average 15-year fixed mortgages also fell to 5.76% this week from 5.90% last week. At the same time a year ago, the 15-year interest rate was 2.39%.
However, while the temporary easing of rising mortgage rates may be “welcome news,” housing costs are still expected to continue rising in 2023. Warning George Latiou, Economic Research Manager at Realtor.com, said:
“The silver lining is that the inventory of homes for sale continues to rise even as sellers take a step back from the market this fall,” Ratiu adds. “Buyers who are ready can expect more properties to choose from and better bargaining positions.”
Mortgage giant is raising loan limits in 2023
Federal Housing Finance Agency (FHFA) announced Fannie Mae and Freddie Mac will raise the baseline conforming loan limit (the maximum loan amount for a single unit property) to $726,200 on Tuesday. This is his $79,000 increase from his $647,200 in 2022.
In more expensive markets such as San Francisco and New York City, the loan limit will exceed $1 million.
Next year’s price hike won’t be as high as the government agency’s implementation in 2022 due to weak house prices. However, some experts remain concerned.
“Ultimately, such support will help push home prices higher, exacerbating the affordability challenges we face in today’s supply-constrained market,” said the industry group Housing Policy Council. said. Said in a statement.
Mortgage applications drop again
Mortgage applications fell 0.8% from last week, despite falling interest rates, according to the Home Loan Bankers Association (MBA).
“Weakening economies at home and abroad should lead to a slowdown in inflation and allow the Fed to slow down the pace of rate hikes.” To tell MBA Vice President and Deputy Chief Economist Joel Kan said:
“Buying activity increased slightly after the Thanksgiving adjustment, but lower interest rates were still not enough to bring back refinancing activity.”
Refinancing applications fell another 13% to the lowest level since 2000. It’s also down 86% compared to the same week last year.
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