Mortgage rates continued to edge lower this week, as the average rate for a 30-year fixed-rate mortgage hit 6.61%, down from 6.67% last week but up from 6.42% a year ago, according to Freddie Mac.
“The rapid descent of mortgage rates over the last two months stabilized a bit this week, but rates continue to trend down,” says Sam Khater, chief economist for Freddie Mac, in a statement. “Heading into the new year, the economy remains on firm ground with solid growth, a tight labor market, decelerating inflation, and a nascent rebound in the housing market.”
The average rate for a 15-year fixed-rate mortgage was 5.93%, down from 5.95% last week but up from 5.68% a year ago.
Although mortgage rates are on the decline, they are yet to result in a meaningful boost in home sales. New home sales plummeted 12.2% in November compared with October, according to estimates from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, while pending home sales were flat compared with October, according to the National Association of Realtors (NAR).
In addition, applications for mortgages for new home purchases decreased 12% in November compared with October, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
The only bright spot in November was existing-home sales, which inched up 0.8% compared with October to see the first increase in five months, according to the National Association of Realtors (NAR).
Due to the season it will likely take more time for the effect of these lower rates to take hold.
Photo: Tierra Mallorca