The 30-year fixed-rate mortgage continued its fall below 7% this week, averaging 6.67% this week, down from the previous week’s dip to 6.95%, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac released Thursday.
This week’s numbers:
- The 30-year FRM averaged 6.67% as of December 21, 2023, down from last week when it averaged 6.95%. A year ago at this time, the 30-year FRM averaged 6.27%.
- The 15-year FRM averaged 5.95%, down from last week when it averaged 6.38%. A year ago at this time, the 15-year FRM averaged 5.69%.
What the experts are saying:
“The 30-year fixed-rate mortgage remained below seven percent for the second week in a row, a welcome downward trend after 17 consecutive weeks above seven percent,” said Sam Khater, Freddie Mac’s Chief Economist. “Lower rates are bringing potential homebuyers who were previously waiting on the sidelines back into the market and builders already are starting to feel the positive effects. A rise in home builder confidence, followed by new home construction reaching its highest level since May, signals a response to meet heightened demand as current inventory remains low.”
Realtor.com Senior Economic Research Analyst Hannah Jones commented:
“The Freddie Mac fixed rate for a 30-year mortgage tumbled 28 basis points this week to 6.67% as incoming data and the Fed’s projections inspired optimism. This week’s dip is the largest weekly drop since November 2022, putting mortgage rates just 0.4 percentage points higher than one year ago, the smallest annual gap in roughly two years. Mortgage rates have fallen each week since the end of October, bringing welcomed relief to prospective buyers. Existing home sales ticked up slightly from the previous month in November, signaling a shift in buyer activity as mortgage rates fall. Both buyer and seller activity remain near recent lows, but each small win in affordability thaws the market slightly. Homebuilder activity surged in November, led by single-family home starts, which increased 18.0% month-over-month and 8.9% year-over-year. New construction continues to take up a larger share of the market than was typical pre-pandemic as builders aim to provide additional home supply.
“Though recent data signals a shift towards a more hospitable housing market, the return to balance will be slow. Mortgage rates and home prices are well above pre-pandemic levels, and are projected to remain elevated through next year. The median listing price in the US was 37.7% higher than pre-pandemic (2019) in November, while for-sale inventory was 34.0% lower. The housing market remains under-supplied, which will keep upward pressure on prices, especially as buyer demand picks up. Prospective buyers have adjusted to today’s challenging environment by focusing on affordable metros. We expect to see considerable sales and price growth in many low-priced metros next year, as highlighted in the Top Housing Markets of 2024. Would-be buyers may also find relief in the rental market, with rents falling annually for the seventh month in a row in November.”
