Mortgage rates fell under 7% for the first time since mid-August this week. It is the seventh straight week that rates have dropped, as inflation improves and the Federal Reserve paused its rate increases.
With the Fed signaling in its most recent meeting that rate cuts may be coming in 2024, mortgage rates are expected to continue falling.
The 30-year fixed-rate mortgage rate fell to an average of 6.95% in the week ending December 14, down from 7.03% a week before, according to data from Freddie Mac released Thursday. A year ago, the average 30-year fixed-rate was 6.31%.
The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit. A current buyer’s rate may be different.
“Potential homebuyers received welcome news this week as mortgage rates dropped below 7% for the first time since August,” said Sam Khater, Freddie Mac’s chief economist.
“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,” Khater said.
The average rate rose above 7% in mid-August and reached as high as 7.79% at the end of October. Recent weeks of declining rates indicate the highest mortgage rates of this cycle may have passed. That’s welcome news for would-be buyers who have been facing the least affordable market since the 1980s.
This is a developing story and will be upated.
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