Mortgage Rates Fall For The Fourth Straight Week

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In the last year, mortgage rates have jacked up from in the low 3% range to highs over 7% in order to combat stubborn inflation, and our housing market has paid the price. Rate hikes stacked on top of the rapid price appreciation we have experienced throughout the last few years are causing a lot of buyers to sit out and try to wait it out until one of the two gives in- either rates or home prices.

Now, while home prices have started to level out and are even dropping in some areas, we also have positive news regarding interest rates. Mortgage rates have trended downward for the fourth week in a row, according to Freddie Mac, a loan-purchasing, government-sponsored company created to make the housing market more affordable for most Americans.

We had watched the line on the mortgage rate graph climb up and up until the week ending on November 10, when a 30-year fixed rate was up to 7.08%. Since then, rates have steadily dropped to 6.33% for the week ending on Dec 8.

The 15-year fixed also peaked during the week ending on November 10 at 6.38%. They are now down to 5.67%.

A year ago, the 30-year fixed rate average was 3.10%, and the 15-year was 2.38%. Since inflation is showing signs of peaking, we expect rates to increase slightly one more time this year to try to get inflation down to the Federal Reserves goal of 2%, and then slowly drop in 2023, to what I personally think will be a new normal for a little while.

Mortgage Demand Remains Low

Despite rates slowly becoming more affordable for the fourth week in a row, there was still a drop in new mortgage applications last week by 1.9% compared to the prior week, according to the Mortgage Bankers Association.

With rates dropping and prices leveling out, it’s possible this drop in applications is partially caused by the Christmas season approaching, but there are still about 40% less applications than there were this time last year, according to the MBA.

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