Mortgage rates fall for fourth week but stay above 7%
By Anna Bahney, CNN
Washington, DC (CNN) — Mortgage rates fell again in the most recent week, as inflation showed signs of slowing. It’s the fourth consecutive week of tumbling rates after rising for seven straight weeks.
The 30-year fixed-rate mortgage fell to an average of 7.29% in the shortened week ending November 22, according to data from Freddie Mac released on Wednesday, a day earlier than normal due to the Thanksgiving holiday. That was down from 7.44% the week before. A year ago, the 30-year fixed-rate was 6.58%.
The average rate rose above 7% in mid-August and since then reached as high as 7.79% at the end of October.
“In recent weeks, rates have dropped by half a percent, but potential homebuyers continue to hold out for lower rates and more inventory,” said Sam Khater, Freddie Mac’s chief economist, in a statement. “This dynamic is reflected in the latest data showing that existing home sales have fallen to a thirteen-year low.”
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.
“In a few short weeks, mortgage rates have largely erased the sharp climb traversed in October,” said Danielle Hale, Realtor.com’s chief economist.
Part of the reason rates eased this week was mixed data that continues to keep investors guessing, Hale said.
“Construction data showed surprising strength, especially in light of fading builder confidence as mortgage rates neared 8% in October, with both permits and starts ticking higher,” she said.
Meanwhile, she added, existing home sales slid to their worst reading since 2010 as home prices rose and mortgage rates pushed the cost of buying even higher.
To combat higher financing costs, homebuyers have turned to making larger down payments.
Down payments rose to a peak in the third quarter of 14.7%, according to a recent Realtor.com report.
“Nevertheless, the cost of borrowing remains high,” she said.
Even after the move lower, today’s rates are unlikely to draw more than the most motivated buyers back into the market, Hale said.
“If rates can hold onto this improvement, or notch a further decline, however, this could mean that ‘buying a home’ does seem like a viable new year’s resolution to a greater number of households,” Hale said.
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