Current:Home > MarketsBoost for homebuyers: Average long-term mortgage rate falls to 6.6%, lowest level since May-Angel Dreamer Wealth Society D1 Reviews & Insights
Boost for homebuyers: Average long-term mortgage rate falls to 6.6%, lowest level since May
View Date:2024-12-23 23:51:54
LOS ANGELES (AP) — The average long-term U.S. mortgage rate fell this week to its lowest level since May, welcome news for prospective homebuyers facing rising home prices and intense competition for relatively few properties on the market.
The average rate on a 30-year mortgage dropped to 6.6% from 6.66% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.15%.
The decline, which follows two weeks of increases, brings the average rate down to the lowest level it’s been in since late May, when it was 6.57%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased this week, dropping the average rate to 5.76% from 5.87% last week. A year ago, it averaged 5.28%, Freddie Mac said.
“This is an encouraging development for the housing market and in particular first-time homebuyers who are sensitive to changes in housing affordability,” said Sam Khater, Freddie Mac’s chief economist. “However, as purchase demand continues to thaw, it will put more pressure on already depleted inventory for sale.”
Home loan borrowing costs have been mostly coming down since late October, after the average rate on a 30-year mortgage surged to 7.79%, the highest level since late 2000.
The average rate remains sharply higher than just two years ago, when it was 3.56%. That large gap between rates now and then has helped limit the number of previously occupied homes on the market by discouraging homeowners who locked in rock-bottom rates from selling.
Still, the broad decline in rates since last fall is good news for homebuyers, as it boosts their purchasing power at a time when home prices have kept climbing rising despite a deep housing market slump. Sales of previously occupied U.S. homes sank more than 19% through the first 11 months of last year.
The decline in mortgage rates has followed a pullback in the 10-year Treasury yield, which lenders use as a guide to pricing loans. The yield, which in mid October surged to its highest level since 2007, has come down on hopes that inflation has cooled enough for the Federal Reserve to shift to cutting interest rates this year.
The central bank has indicated it will likely cut rates several times in 2024 because inflation has been cooling since its peak two summers ago. Uncertainty remains, however, on how many cuts the Fed may deliver this year and how soon it would begin.
If rates continue to ease, as many economists expect, that should help boost demand heading into the spring homebuying season, which traditionally begins in late February.
Still, at this point, economists generally predict the average rate on a 30-year mortgage going no lower than 6%.
veryGood! (96436)
Related
- Daniele Rustioni to become Metropolitan Opera’s principal guest conductor
- As Oil Demand Rebounds, Nations Will Need to Make Big Changes to Meet Paris Goals, Report Says
- United Airlines will no longer charge families extra to sit together on flights
- Inside Clean Energy: In South Carolina, a Happy Compromise on Net Metering
- Exclusive Yankee Candle Sale: 50% Off Holiday Candles for a Limited Time
- A Single Chemical Plant in Louisville Emits a Super-Pollutant That Does More Climate Damage Than Every Car in the City
- Collin Gosselin Pens Message of Gratitude to Dad Jon Amid New Chapter
- Fossil Fuel Companies Took Billions in U.S. Coronavirus Relief Funds but Still Cut Nearly 60,000 Jobs
- Denver district attorney is investigating the leak of voting passwords in Colorado
- Are your savings account interest rates terribly low? We want to hear from you
Ranking
- Halle Berry surprises crowd in iconic 2002 Elie Saab gown from her historic Oscar win
- Is the economy headed for recession or a soft landing?
- The Home Depot says it is spending $1 billion to raise its starting wage to $15
- Why Kristin Cavallari Isn't Prioritizing Dating 3 Years After Jay Cutler Breakup
- Eva Longoria Shares She and Her Family Have Moved Out of the United States
- Air India orders a record 470 Boeing and Airbus aircrafts
- Hilaria Baldwin Admits She's Sometimes Alec Baldwin's Mommy
- Expansion of I-45 in Downtown Houston Is on Hold, for Now, in a Traffic-Choked, Divided Region
Recommendation
-
Philadelphia mass transit users face fare hikes of more than 20% and possible service cuts
-
David Malpass is stepping down as president of the World Bank
-
Inside Clean Energy: Four Charts Tell the Story of the Post-Covid Energy Transition
-
24 Bikinis for Big Boobs That Are Actually Supportive and Stylish for Cup Sizes From D Through M
-
Cleveland Browns’ Hakeem Adeniji Shares Stillbirth of Baby Boy Days Before Due Date
-
DNA from pizza crust linked Gilgo Beach murders suspect to victim, court documents say
-
Race, Poverty, Farming and a Natural Gas Pipeline Converge In a Rural Illinois Township
-
One officer shot dead, 2 more critically injured in Fargo; suspect also killed