Mortgage rates don’t make for an interesting Thanksgiving dinner discussion, but this year is a complete exception. You can bet your bottom dollar that the subject will come up at your table if there is a house buyer or seller.
Since the beginning of 2022, mortgage rates have more than doubled, soaring past the 7% barrier and reaching a 20-year high in late October.
However, there has been a great reprieve over the last two weeks.
Dropping Mortgage Rates
The big news is that mortgage rates decreased for the second week. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.58% in the week ending November 23. The most popular mortgage option is currently 0.5 percentage points below its peak.
Is this enough of a break to encourage more people to buy homes? It was in the past, but it is uncertain whether the cycle will continue.
However, it’s important to note that, in keeping with the drop in rates, mortgage applications have increased each of the previous two weeks, according to information from the Mortgage Bankers Association. Potential purchasers are watching the situation closely and seizing any window of opportunity.
Easier Market for Buyers
Another encouraging development is that the rate of increase in home prices has slowed down for the sixth consecutive week. Glacially slower
For the week ending November 19, prices were 11% higher than they were a year previous, which was a somewhat slower increase than the 11.1% spike seen the last week.
While double-digit annual gains are still difficult to accept, they’re likely to slow even more by the end of the year to single-digit yearly increases.
Stagnant Housing Market
However, according to statistics, fewer properties were posted for sale in the week ending November 19 than in the same period last year. That is the 20th consecutive week of annual reductions.
As our October research indicated, seller confidence is at an all-time low despite the positive news about mortgage rates and property values. Thus, there are fewer new properties available for homebuyers to look at.