Mortgage rate decline sparks optimism among homebuyers

Freddie Mac reports a decrease in 30-year fixed-rate mortgages

Mortgage rate decline sparks optimism among homebuyers

The 30-year fixed-rate mortgage has declined for the fifth straight week, shifting in favor of prospective homebuyers.

Recent data released by Freddie Mac showed a downward trend in mortgage rates, with the 30-year fixed-rate mortgage (FRM) averaging 7.22% as of November 30, 2023. This figure represents a slight decrease from the previous week's average of 7.29% but higher than the same time last year when it stood at 6.49%.

Freddie Mac chief economist Sam Khater highlighted the market's changing dynamics, suggesting a positive outlook for potential homebuyers.

Read next: How brokers can win in a tough market

"Market sentiment has significantly shifted over the last month, leading to a continued decline in mortgage rates," Khater said in Freddie's latest report. "The current trajectory of rates is an encouraging development for potential homebuyers, with purchase application activity recently rising to the same level as mid-September when rates were similar to today's levels. The modest uptick in demand over the last month signals that there will likely be more competition in a market that remains starved for inventory."

The report also detailed changes in the 15-year FRM, which now averages 6.56%, down from the previous week's 6.67% and up from last year's 5.76% average.

"Mortgage rates fell again in the last week, as investors become increasingly convinced that inflation will keep fading and that the Federal Reserve is done with raising short-term interest rates," added Holden Lewis, home and mortgage expert at NerdWallet. "Every little decrease in mortgage rates brings out more home shoppers. There's always a lull in home sales during the holidays, but this year's drop might not be as deep as usual. Still, home sales are sparse because of the effect of high rates and meager inventory."

Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.