Mortgage interest rates continue to fall

© Reuters. FILE PHOTO: A ‘For Rent, For Sale’ sign is seen outside a house in Washington, US, on July 7, 2022. REUTERS/Sarah Silbiger/File Photo

Author: Amina Niasse

NEW YORK (Reuters) – Mortgage rates fell to a six-month low this week, the lowest since June, suggesting relief to potential buyers amid a recovering bond market.

The average 30-year fixed-rate mortgage fell to 6.67% on Thursday from 6.95% last week, according to a report issued by Freddie Mac.

“The 30-year fixed mortgage rate remained below 7 percent for the second week in a row, a welcome downward trend after 17 consecutive weeks above 7 percent,” said Sam Khater, chief economist at Freddie Mac. “Lower rates are bringing potential homebuyers who previously waited on the sidelines back into the market, and builders are already starting to feel the positive effects.”

Mortgage rates have been rising steadily since 2022 following the Federal Reserve’s aggressive rate hike campaign. After the Fed held its benchmark for three straight meetings, expectations of its cycle coming to an end pushed yields on mortgage-backed securities lower and rates eased from October’s two-decade highs near 8%.

High interest rates this year have created fierce competition between buyers and sellers, discouraging homeowners locked into lower rates from selling and pricing out potential buyers. Softening mortgage interest rates sidelined some sellers, with existing home sales unexpectedly rising 0.8% in November after a five-month decline, according to a report from the National Association of Realtors released Wednesday.