{"id":51641,"date":"2023-11-30T17:27:55","date_gmt":"2023-11-30T17:27:55","guid":{"rendered":"https:\/\/prosfunds.com\/business\/mortgage-rates-drop-for-fifth-straight-week\/"},"modified":"2023-11-30T17:27:56","modified_gmt":"2023-11-30T17:27:56","slug":"mortgage-rates-drop-for-fifth-straight-week","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=51641","title":{"rendered":"Mortgage rates drop for fifth straight week"},"content":{"rendered":"
\n

\n Mortgage rates continued to drop this week. It\u2019s the fifth straight week rates have moved lower.\n <\/p>\n

\n The 30-year fixed-rate mortgage fell to an average of 7.22% in the week ending November 30, down from 7.29% the week before, according to data from Freddie Mac released Thursday. A year ago, the average 30-year fixed-rate was 6.49%.\n <\/p>\n

\n \u201cMarket sentiment has significantly shifted over the last month, leading to a continued decline in mortgage rates,\u201d said Sam Khater, Freddie Mac\u2019s chief economist.\n <\/p>\n

\n \u201cThe current trajectory of rates is an encouraging development for potential homebuyers, with purchase application activity recently rising to the same level as mid-September when rates were similar to today\u2019s levels,\u201d he said.\n <\/p>\n

\n Khater added that the modest uptick in demand over the last month suggests that there will likely be more competition in a market that still remains starved for inventory.\n <\/p>\n

\n 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\u2019s rate may be different.\n <\/p>\n

\n The average rate jumped above 7% in mid-August and kept rising for seven straight weeks, reaching as high as 7.79% at the end of October. But the recent declines could be a sign that mortgage rates have peaked\u00a0for this cycle.\n <\/p>\n

\n Inflation has dropped significantly due to the Federal Reserve\u2019s historic rate hikes over the past two years, helping to bring down mortgage rates.\n <\/p>\n

\n But investors and analysts are eying the upcoming Fed meeting\u00a0on December 12-13 to see if additional rate hikes are needed \u2014 and the direction of future mortgage rate movements.\n <\/p>\n

\n \u201cWhile some Federal Reserve policymakers expressed growing confidence that the existing monetary policy is sufficiently restrictive to reduce inflation to the 2% target, others emphasized the potential necessity for additional rate hikes to achieve the target over a reasonable timeframe,\u201d said Jiayi Xu, an economist at Realtor.com.\n <\/p>\n

\n Even with mixed messages from the Fed, many investors seem to think that the central bank has concluded its interest rate hike cycle, Xu said, especially considering the 10-year yield dropped below 4.3% for the first time since September.\n <\/p>\n

\n While the Fed does not set the interest rates that borrowers pay on mortgages directly, its actions influence them. Mortgage rates track the yield on 10-year US Treasuries, which move based on anticipation about the Fed\u2019s actions, what the Fed ends up doing and investors\u2019 reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.\n <\/p>\n

\n Homebuyers are slowly coming off the sidelines as mortgage rates come down and affordability could improve a bit in the coming year.\n <\/p>\n

\n \u201cThe good news for prospective homebuyers is that affordability is expected to turn around in 2024, though at a slower pace, through a combination of lower mortgage rates and lower prices brought about by cooling inflation and a less frenzied housing market,\u201d Xu said.\n <\/p>\n

\n \u201cWith a shift in the mortgage rate trend from a general increase to a general decrease, there is a likelihood that consumers may no longer feel the urgency to make hasty decisions,\u201d she said.\n <\/p>\n

\n As a result of rates trending down, there was a slight increase in applications overall for the week ending on November 24, driven by a 5% increase in purchase applications, according to the Mortgage Bankers Association.\n <\/p>\n

\n Rates have declined 50 basis points over the past five weeks, which has helped to spur a small increase in purchase applications, but activity last week was still roughly 20% lower than a year ago, said Joel Kan, MBA\u2019s vice president and deputy chief economist.\n <\/p>\n

\n \u201cThe purchase market remains depressed because of the ongoing low supply of existing homes on the market,\u201d Kan said. \u201cSimilarly, refinance activity will likely be muted for some time, even with the recent decline in rates, as many borrowers locked in much lower rates in 2020 and 2021.\u201d\n <\/p>\n

\n But for current buyers, typical monthly mortgage payments rose in October making affording a home an even bigger challenge, according to a separate study from MBA.\n <\/p>\n

\n The national median mortgage payment anticipated by those applying for a loan to buy a home increased to $2,199 a month from $2,155 in September, according to MBA. And that\u2019s a 9.3% increase from a year ago, amounting to a $143 jump in the monthly payment.\n <\/p>\n

\n Rates are expected to cool off in the coming year but perhaps not by as much as buyers would like.\n <\/p>\n

\n According to a forecast from Realtor.com, the average mortgage rate is projected to be 6.8% in the next year. That is not expected to improve the inventory picture much, said Xu.\n <\/p>\n

\n \u201cAs mortgage rates are expected to remain elevated, current homeowners with low mortgage rates are expected to stay put, leading to a decline in for-sale inventory,\u201d said Xu.\n <\/p>\n

\n Meanwhile, she said, since affordability is expected to remain a top concern for homebuyers, the outlook for home sales\u00a0next year is projected to remain steady at lower levels.\n <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Mortgage rates continued to drop this week. It\u2019s the fifth straight week rates have moved lower. The 30-year fixed-rate mortgage fell to an average of 7.22% in the week ending November 30, down from 7.29% the week before, according to data from Freddie Mac released Thursday. A year ago, the average 30-year fixed-rate was 6.49%. […]<\/p>\n","protected":false},"author":1,"featured_media":51642,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-51641","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\nMortgage rates drop for fifth straight week | Prosfunds<\/title>\n<meta name=\"description\" content=\"Mortgage rates continued to drop this week. It\u2019s the fifth straight week rates have moved lower. 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