Mortgage rates fall for ninth straight week

Mortgage rates fell for the ninth week in a row on signs that the Federal Reserve may cut interest rates next year.

The average interest rate on a 30-year fixed-rate mortgage was 6.61% as of Thursday, down from 6.67% the previous week, according to . The data was released on Thursday Written by Freddie Mac.

Mortgage rates fell below 7% in mid-December for the first time since August, as the Federal Reserve predicted interest 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 trend lower,” Freddie Mac chief economist Sam Cater said in a statement.

“As we head into the new year, the economy remains strong with strong growth, a tight labor market, slowing inflation, and an initial recovery in the housing market.”

While the latest numbers are still above last year’s average 30-year fixed-rate mortgage rate of 6.42%, the downward trend is a welcome sign for homebuyers who have weathered a dire housing market.

a Recent analysis by Redfin Researchers found that the typical American household will be able to purchase only 15.5 percent of homes for sale in 2023, meaning that their monthly mortgage payments will not exceed 30 percent of their county’s median income. are doing.

The real estate group said the proportion of affordable housing hit an all-time low this year and expects this number to improve as mortgage rates continue to fall and more homes come onto the market. .

“Many of the factors that made 2023 the worst year for home purchases on record are beginning to ease,” Elijah de la Campa, senior economist at Redfin, said in a statement.

“Mortgage rates have fallen below 7% for the first time in months, and overall inflation continues to cool as home price growth slows as more people list their homes due to lower interest rates. We will see a surge in home purchases in the new year to take advantage of the decline and post-holiday listings.”