As per the latest stats, the Mortgage rate fall for fourth week but stayed above 7%. The current average mortgage rate is 7.29%
As inflation showed signs of slowing down, Mortgage rates fall for fourth week after tumbling rates for the straight seven weeks. The 30-year fixed rate mortgage dropped to an average of 7.29% in the week ending November 2 as per the data of the Freddie Mac. The week before the mortgage rate is 7.44% as the 30-year fixed rate one year prior is 6.58%.
The mortgage rates have stayed high over the past two years with the surge in interest rates by the Federal Reserve. As the average rate rose above 7% in the mid of August and since then it has been rapidly rising and reached 7.79% at the end of October.
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Mortgage rate fall for fourth week as inflation slows down
The mortgage rate fall for fourth week but stayed above 7% is a good sign of improvement for the housing market . As the rates have dropped by half a percent , the home buyers are further searching for lower rates and more inventory to purchase home . Freddie Mac ‘s chief economist Sam Khater said in a statement that “ This dynamic is reflected in the latest data showing that existing home sales have fallen to almost thirteen-year low “
The average mortgage rate is determined by the Mortgage applications that Freddie Mac receives from thousands of lender all across the country. The survey includes only those borrowers who have excellent credit scores and only put 20% of the money down. The current borrower rate may change from time to time.
Danielle Hale, Realtors.com chief economist stated that “ In few short weeks, mortgage rates have largely erased the sharp climb trans versed in October”
The mortgage rate fall for fourth week as the Fed interest rates have slowed the pace of home sales, but few economists expect the “ staring contest “ between the home owners and buyers to end before too long.
The interest rates are eased this week as mixed data keeps the investor guessing and also Hale stated that “ Construction data showed surprising strength , especially in the light of fading builder confidence as mortgage rates reached near 8% in October with both the permits and starts ticking higher “
Also she added that the existing home sales reached to the worst reading since the year 2010 . The key reason for that is surge in home prices along with mortgage rates which even makes it more difficult to afford home. To tackle with the high financing cost , the home buyers are forced to make large down payments.
How mortgage rates affect the home affordability ?
As per the report of the U.S Department of Housing and Urban development the median family income in 2023 is approximately $96,300 and the median priced for existing home sold in October 2023 was $391,800. Considering the rough estimate of mortgage rate of 7.55% with 2 percent down payment , the monthly payment will be $2,202. This amount accounts to almost 27 of the family income.
The rapid rise in the mortgage rates in the past two years has slowed down the home sales. Also the high rates have a dual impact on the housing market , firstly reduced affordability for the buyers and secondly strengthening the rate lock in for all the sellers. As mortgage rate fall for fourth week, there is ray of home for first-time home buyers to further expect a decline in mortgage rates.
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