The latest data suggests that mortgage rates have fallen for the third consecutive week, signaling a potential slowdown in inflation. As of November 16, the 30-year fixed-rate mortgage averaged 7.44%, a decrease of 6 basis points from the previous week. This figure is also lower compared to the 7.5% average from the same time last year.
In addition, the average rate on the 15-year mortgage dropped to 6.76%, down from 7.81% the previous week and 5.98% a year ago. These figures highlight a favorable trend for potential homebuyers.
Freddie Mac’s weekly report on mortgage rates, which is based on thousands of applications received from lenders across the country, further supports this data. When borrowers apply for a mortgage, their information is submitted to Freddie Mac.
Chief economist at Freddie Mac, Sam Khater, stated, “For the third straight week, mortgage rates trended down, as new data indicates that inflationary pressures are receding.” He identifies the combination of continued economic strength, lower inflation, and lower mortgage rates as factors that could encourage more homebuyers to enter the market.
Lisa Sturtevant, chief economist at Bright MLS, agrees that there is potential for further decline in mortgage rates. She noted that historically the gap between the 10-year Treasury yield and the 30-year fixed-rate mortgage rate is around 180 basis points. Despite some narrowing of this gap, the 30-year mortgage rate still remains 280 basis points higher than the bond yield.
Looking forward, the National Association of Realtors predicts that the 30-year rate will drop below 7% during the spring buying season, although it is expected to remain above 6%. Lawrence Yun, the NAR’s chief economist, expressed confidence that we have already reached the peak in terms of interest rates. The next question is when rates will begin to decrease.
Overall, the recent decline in mortgage rates coupled with favorable economic conditions provides an advantageous environment for potential homebuyers.