The 30-year fixed-rate mortgage (FRM) averaged 6.27% last week, down from 6.31% the previous week, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac, released Thursday, Dec. 22.
The latest numbers:
- 30-year fixed-rate mortgage averaged 6.27% as of December 22, 2022, down from the previous week when it averaged 6.31%. A year ago at this time, the 30-year FRM averaged 3.05%.
- 15-year fixed-rate mortgage averaged 5.69% last week, up from the previous week when it averaged 5.54%. A year ago at this time, the 15-year FRM averaged 2.30%.
What the experts are saying:
“Heading into the holidays, mortgage rates continued to move down,” said Sam Khater, Freddie Mac’s chief economist. “Rates have declined significantly over the past six weeks, which is helpful for potential homebuyers, but new data indicates homeowners are hesitant to list their homes. Many of those homeowners are carefully weighing their options as more than two-thirds of current homeowners have a fixed mortgage rate of below four%.”
Realtor.com manager of economic research, George Ratiu, commented:
“The Freddie Mac fixed rate for a 30-year loan continued declining from last week, with a modest 4 basis point slide to 6.27%, even as the 10-year Treasury has been rising over the past week. Investors welcomed this week’s consumer confidence data which hit an 8-month high. And while markets are anticipating tomorrow’s Personal Consumption Expenditure price index numbers, the expectation is that they will mirror the CPI’s moderation, and point to a slowdown in inflation.
“While the economy is not entirely out of the proverbial woods, further deceleration in inflation would be welcome news for capital markets looking for more certainty about next year’s direction.
“Today’s mortgage rates are keeping homebuyers and sellers in a defensive stance. The monthly payment for a median-priced home is currently more than $2,000, a 64% increase from a year ago–when prices were rising at a double-digit pace, but interest rates were less than half of today’s. First-time homebuyers are struggling with high consumer prices, property values and interest rates, which are pushing savings rates to very low levels and delaying their ability to gather a sufficient down payment. At the same time, current homeowners looking for their next home are finding that the prospect of higher prices and, in many cases, double or triple their current interest rate, are causing them to rethink their decision to move.
“This combination is translating into a significant decline in real estate transactions, as this week’s drop in existing home sales data showcased. A large share of homebuyers are finding their path to homeownership temporarily blocked by financial barriers. Not surprisingly, the search for affordability is leading many toward lower-priced metros, where the cost of a house can fit within more families’ budgets. Markets like Manchester, New Hampshire, Columbus, Ohio, Fort Wayne, Indiana, Hartford, Connecticut, Lancaster, Pennsylvania, or Topeka, Kansas are still seeing homes change hands as buyers from more expensive locations are lured by solid local economies and median prices, which in some cases, are still below $300,000.”
