Mortgage Rates Hit Lowest Level Since June
Mortgage rates have reached their lowest point since June this week, following a downward shift in Treasury yields due to changing market expectations. Despite the decline, data suggests that buyers have not yet returned to the market.
According to Freddie Mac, the average 30-year fixed-rate mortgage was at 6.67% as of Thursday, marking the lowest rate since June. This continues the eight-week trend of sliding rates from their peak at 7.79% in late October.
Sam Khater, the chief economist at Freddie Mac, expressed optimism about the decline, stating that the mortgage rates have remained below 7% for two consecutive weeks. Builder confidence has also increased as a result of falling mortgage rates.
December has seen a significant decrease in mortgage rates, with a drop of over half a percentage point since November. The Federal Reserve's indication of interest rate cuts in 2023 has ignited a bond rally, leading to a lower 10-year Treasury yield, which often influences mortgage rates.
Although applications for home purchase loans, which generally indicate future home sales, have risen slightly from their recent lows, buyers have not shown a strong response to the recent rate drops. Mortgage Bankers Association President and CEO Bob Broeksmit believes that this could change in the upcoming winter home buying season when activity typically slows down. The trade group anticipates an improvement in both new and existing-home sales in 2024 as more listings become available and mortgage rates continue to decrease.
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