Mortgage rates have fallen for the second straight week

Mortgage rates fell again this week after dropping nearly half a percentage point last week.

The 30-year fixed-rate mortgage averaged 6.58% in the week ended Nov. 23, down from 6.61% the previous week, according to Freddie Mac. A year ago, the 30-year fixed rate was 3.10%.

Mortgage rates rose through much of 2022, spurred by the Federal Reserve’s unprecedented campaign to raise interest rates to tame rising inflation. But rates fell last week amid reports that inflation had finally peaked.

“This volatility makes it difficult for potential homebuyers to know when to enter the market, and this is reflected in recent data showing that existing home sales are slowing at all price points,” said Freddie Mac Chief Economist Sam Khater.

The average mortgage rate is based on mortgage applications Freddie Mac receives from thousands of lenders nationwide. Only borrowers with 20% down and excellent credit are included in the survey. But many buyers who put down less money up front or have excellent credit will pay more than the average rate.

Average weekly rates, typically released by Freddie Mac on Thursdays, are released the day before Thanksgiving.

Mortgage rates tend to track the yield on the 10-year US Treasury bond. As investors see or expect interest rate hikes, they tend to move higher yields and higher mortgage rates.

The 10-year Treasury has been trading in a lower range of 3.7% to 3.85% since the release of a pair of inflation reports almost two weeks ago that showed prices rose more slowly than expected in October. Danielle Hale, chief economist at, said this led to a major reset of investors’ expectations about future rate hikes. Prior to that, the 10-year Treasury rose above 4.2%.

However, the market may be a bit early to celebrate the improvement in inflation, he said.

At the Fed’s November meeting, Chairman Jerome Powell pointed to the need for continued interest rate hikes to tame inflation.

“This could mean that mortgage rates could rise again, and that risk increases if inflation figures move to the higher side next month,” Hale said.

While it can be difficult to time the market to get a low mortgage rate, multiple home buyers see a window of opportunity.

“After generally high mortgage rates throughout 2022, the recent changes in favor of buyers are welcome and could save the average home buyer more than $100 a month compared to what they would pay if interest rates were above 7%. just two weeks ago,” Hale said.

Both purchase and refinance applications rose slightly last week as mortgage rates fell. Refinancing activity is still more than 80% below last year’s pace, when interest rates hovered around 3%, according to a weekly report from the Mortgage Bankers Association.

However, with mortgage rates averaging three times the week-to-week swing seen in a typical year and home prices still at historically high levels, many potential buyers have been put off, Hale said.

“The long-term housing shortage is keeping home prices high despite an increase in the number of homes on the market, and buyers and sellers may have a harder time adjusting price expectations,” he said.

In a separate report released Wednesday, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau said new home sales rose in October, up 7.5% from September, but down 5.8% from a year earlier.

While this is higher than forecast and reflects a recent trend of declining sales, it is still lower than a year ago. Home construction has been at a historic low for a decade, and builders are pulling back as the housing market shows signs of slowing.

“New home sales beat expectations, but an overall downward trend remains questionable given high mortgage rates and pessimism from builders,” said Robert Frick, corporate economist at Navy Federal Credit Union.

Despite an overall downward trend in sales, new home prices remain at record highs.

The median price of a new home was $493,000, a record high, up 15% from a year ago.

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