Updates on Personal Finance Matters

Mortgage Rates

The average mortgage rates have dropped below 7% for the first time since August, according to Freddie Mac.

The average mortgage rate drops below 7% for the first time since August, according to Freddie Mac

The average rate on a 30-year mortgage fell to 6.95% this week, down from 7.03% last week, according to Freddie Mac. This marks the seventh consecutive decline in the rate in seven weeks, providing some relief to borrowers looking to secure a home loan, as rates were hovering around 8% at the end of October.

Expectations for Further Decline in Mortgage Rates

Mortgage rates have declined due to falling inflation in recent months, leading to expectations in the financial markets that the Federal Reserve will soon begin cutting the benchmark interest rate, which significantly affects mortgage rates. These expectations were bolstered on Wednesday when Federal Reserve policymakers indicated they do not expect to raise the key interest rate any further and will be cutting it next year.

Continued Decline in Mortgage Rates and Boosting the Real Estate Market

Mortgage rates may continue to decline in the coming months, stimulating activity in the real estate market that has been frozen due to high mortgage rates and housing prices that make ordinary homes available only to high-income borrowers or individuals who already own homes for sale.

“Given the ongoing slowdown in inflation and the Federal Reserve’s current expectations to lower the federal funds target rate next year, we are likely to see a gradual improvement in the housing market in the new year,” said Sam Khater, chief economist at Freddie Mac.

Freddie Mac Average Mortgage

Freddie Mac’s 30-year mortgage average is a weekly reading, based on a mix of the previous five days’ rates. Investopedia publishes its own daily averages for 13 different types of mortgages. The current 30-year average today is 7.28%, the lowest reading since July 26.

Sources: Investopedia, Freddie Mac.

Source: https://www.investopedia.com/average-mortgage-rate-falls-below-7-for-first-time-since-august-8416070

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