Mortgage rates maintain downward trend to close 2022: Freddie Mac

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The steady decline in mortgage rates is good news for buyers marginalized by high borrowing costs, but the housing supply has been slowly growing, according to Freddie Mac. 🇧🇷iStock🇧🇷

Last week, mortgage rates fell for the sixth straight week as the market continues to react to positive economic indicators, according to Freddie Mac.

The average rate for a 30-year fixed-rate mortgage fell to 6.27% for the week ended Dec. 22, according to Freddie Mac’s Primary Mortgage Market Research. This was down from the previous week, when it averaged 6.31%, but it remains significantly higher than last year, when it averaged 3.05%.

The average rate for a 15-year mortgage was 5.69% last week, up from 5.54% the week before and 2.30% last year.

The steady decline in mortgage rates is good news for buyers marginalized by high borrowing costs. Still, housing supplies have been growing slowly, according to Freddie Mac chief economist Sam Khater.

“Rates have dropped significantly over the last six weeks, which is helpful for potential homebuyers, but new data indicates that homeowners are hesitant to list their homes,” Khater said. “Many of these homeowners are carefully weighing their options, as more than two-thirds of current homeowners have a fixed mortgage rate below four percent.”

If you’re interested in taking advantage of lower mortgage rates, consider refinancing your loan to lower your monthly payments. You can visit Credible to find your custom interest rate without affecting your credit score.

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Home sales fall, but demand grows slowly

In November, home sales fell to a seasonally adjusted annual rate of 4.09 million, down 35.4% from the same period last year, according to a report by the National Association of Realtors (NAR). ).

However, buyers may return to the market as rates come down, the Mortgage Bankers Association (MBA) said. Mortgage applications were up 0.9% from the previous week, according to the seasonally adjusted MBA index.

The Refinance Ratio was up 6% from the prior week, an improvement from prior weeks but still 85% down from the same week a year ago, according to the MBA.

“The market may be thawing out since mortgage rates have fallen for five straight weeks,” said Lawrence Yun, chief economist at NAR. “The average monthly mortgage payment is now nearly $200 less than it was several weeks ago when interest rates peaked this year.”

If you’re interested in taking advantage of mortgage rates while they’re lower, consider refinancing your home loan. You can visit Credible to compare several mortgage lenders at once and choose the one with the best interest rate for you.

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See how shoppers can maximize their buying power

Buyers considering buying a home in 2023 should know the market where they would like to buy and understand where the comparables are, said Josip Rupena, CEO of financial technology company Milo. This is one step buyers can take to find a home in their target price range.

Buyers can also consider these tips if they want to optimize their purchasing power:

Get pre-qualified for a mortgage

Rupena said pre-qualifying for a mortgage would help buyers understand what they can afford and better budget and how it will affect their monthly expenses.

“Doing the research today will help you feel good about buying in 2023,” said Rupena.

Increase your savings to make a bigger down payment

Maximizing the amount made on a down payment can help reduce buyers’ financial payments. In an environment of rising rates, this is even more important, according to Michael Gifford, CEO of financial technology company Splitero.

“Buying a home depends on your financial situation, your wants and your needs,” said Gifford. “With the current high interest rates and home prices, plus economic uncertainty, think about long-term scenarios, considering the employment situation and the property’s resale and rental potential.”

If you’re ready to shop for a mortgage loan, you can use the Credible marketplace to help you easily compare interest rates from multiple mortgage lenders and get prequalified in minutes.

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