The average long-term mortgage rate fell for a fourth straight week, falling more than three-quarters of a point after hitting a 20-year high last month.
Mortgage buyer Freddie Mac reported Thursday that the average 30-year rate fell to 6.33 percent from 6.49 percent last week. A year ago, the average was 3.1%.
The average long-term rate was 7.08% in early November, but has since seen its steepest 4-week decline since 2008.
Freddie Mac’s Chief Economist Sam Hater said, “Despite the large drop at Freddie Mac, homebuyer sentiment remains subdued.
Mortgage rates are still more than double what they were a year ago, reflecting a sharp rise in the yield on the 10-year Treasury note. Yields are affected by a variety of factors, including global demand for US Treasuries and investors’ expectations of future inflation, which generally raises the prospect of rising interest rates.
The Federal Reserve, which has been raising its short-term lending rate since March, raised its rate by another 0.75 percentage point in a bid to fend off the highest inflation in decades, the fourth time it has increased by more than three times the usual margin. p. year. Its prime rate is currently between 3.75% and 4%.
Markets rose last week after Fed Chairman Jerome Powell hinted that the Fed may raise its key interest rate by only half a point at next week’s December meeting. Later, based on the Fed’s previous forecasts, rate hikes could come in the traditional quarter-point range at their February and March meetings. Powell said the Fed should keep rates on hold longer than originally planned because inflation has eased slightly but remains well above the central bank’s 2 percent target.
Along with the spike in mortgage rates and rising home prices this year, the average rate on a 30-year mortgage has added hundreds of dollars to monthly home loan payments compared to last year. time
This has created an affordability barrier for many would-be homebuyers and fueled the housing market downturn this year. Sales of previously occupied homes fell for the ninth straight month in October, the slowest pre-pandemic annual sales pace in more than 10 years.
The 15-year mortgage rate, popular with those refinancing their homes, fell to 5.67 percent from 5.76 percent last week. A year ago it was 2.38%.
.