Mortgage rates continued downward for a second week, with recent economic data suggesting inflation may have peaked. The Federal Reserve, while still likely to raise rates again in December, has become less hawkish on the extremity of the hikes.
The 30-year fixed-rate mortgage averaged 6.58%, down from 6.61% last week, according to mortgage packager Freddie mac. A year ago, the 30-year FRM averaged 3.10%.
The 15-year fixed-rate mortgage averaged 5.90% also down from last week when it averaged 5.98%. A year ago, the 15-year FRM averaged 2.42%.
Freddie Mac has stopped reporting the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM).
"Mortgage rates continued to tick down heading into the Thanksgiving holiday," said Sam Khater, Freddie Mac’s chief economist. "In recent weeks, rates have hit above seven percent only to drop by almost half a percentage point."
While the continued decline in mortgage rates is welcome news, according to Freddie Mac, there is still a long road ahead for the housing market. Inflation remains elevated, the Federal Reserve is likely to keep interest rates high and consumers will continue to feel the impact.
Khater continued: "This volatility is making it difficult for potential homebuyers to know when to get into the market, and that is reflected in the latest data which shows existing home sales slowing across all price points."
Freddie Mac's monthly volume survey for October showed its total mortgage portfolio increased at an annualized rate of 1.9% in October.
The single-family refinance-loan purchase and guarantee volume was $4.8 billion in October, representing 18% of total single-family mortgage portfolio purchases and issuances.
The Federal Reserve's interest rate hike in November marked the sixth increase of the year. Interest rates heavily effect mortgage rates because the Fed's interest rates are the base borrowing cost for banks.