Mortgage rates fell for the ninth straight week amid signs the Federal Reserve may cut interest rates next year.
The average 30-year fixed mortgage rate fell to 6.61 percent Thursday, down from 6.67 percent the previous week, according to data released Thursday by Freddie Mac.
Mortgage rates fell below 7 percent in mid-December for the first time since August after the Federal Reserve forecast rate cuts next year.
“The rapid decline in mortgage rates over the past two months has stabilized a bit this week, but rates continue to fall,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
“Heading into the new year, the economy remains on solid footing, with solid growth, a tight labor market, decelerating inflation and a nascent rebound in the housing market. »
The latest figure remains higher than last year’s 30-year fixed mortgage rate average of 6.42%, but the downward trend is a welcome sign for buyers who have weathered a sluggish housing market.
A recent Redfin analysis found that the typical American household could only afford 15.5% of the homes for sale in 2023, meaning monthly mortgage payments would not exceed 30% of the county median income.
The share of affordable housing hit a record high this year, according to the real estate group, which expects those numbers to improve as mortgage rates continue to fall and more homes come on the market.
“Many of the factors that made 2023 the least affordable year ever for home buying are easing,” Elijah de la Campa, senior economist at Redfin, said in a statement.
“Mortgage rates are below 7% for the first time in months, house price growth is slowing as falling rates prompt more people to list their homes, and overall inflation continues to cool . We will likely see an increase in home purchases in the new year as buyers take advantage of lower mortgage rates and more listings after the holidays.
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