Mortgage rates in US finally slide below 7%
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Mortgage rates fell below 7% for the first time in four months, bringing some relief to a US housing market plagued with affordability issues.
The average for a 30-year, fixed loan was 6.95%, down from 7.03% last week, Freddie Mac said in a statement Thursday.
Borrowing costs have eased for seven straight weeks, bringing rates down from a high of 7.79% in late October. The decline raises the prospects that buyers sidelined by high interest costs may return.
“Given inflation continues to decelerate and the Federal Reserve Board’s current expectations that they will lower the federal funds target rate next year, we likely will see a gradual thawing of the housing market in the new year,” Sam Khater, Freddie Mac’s chief economist, said in the statement.
House hunters are still grappling with a lack of properties for sale as owners with lower rates have been reluctant to list homes. That challenge will likely still loom over the market, according to Greg McBride, chief financial analyst at Bankrate.com.
“A decline below the 7% threshold may trigger some additional demand among prospective home buyers,” McBride said. “But it won’t move the needle on supply — at least not right away — so the frustrations about high home prices and limited selection will persist.
On Wednesday, the Federal Reserve held its benchmark rate steady and forecast a series of cuts next year, moves that sent yields on the 10-year Treasury falling.
Other measures of mortgage rates slumped even more after the central bank decision. Mortgage News Daily — which updates more frequently — said the average rate on a 30-year fixed mortgage was 6.82%.
