Average long-term US mortgage rate continues to drop
Finally, there’s some good news for prospective homebuyers facing affordability headwinds: The average long-term US mortgage rate remains in the mid-6 percent range, marginally increasing homebuyer demand.
According to mortgage buyer Freddie Mac, 30-year fixed rates have largely been in decline since the end of October when they were in the upper 7 percent range (7.79% at the peak), and now hover in the mid-6 percent range (6.66% most recently). While this is a positive trend, the average rate is still significantly higher than it was two years ago, when it hovered around 3 percent.
Buyers who were previously shying away from the market are completing home loan applications at an increased rate – up an adjusted 0.3% last week from the previous week, according to the Mortgage Bankers Association.
Homeowners refinancing their home loans are also seeing a decline in borrowing costs on 15-year fixed-rate mortgages. As of January 11, 2024, the average rate fell from 5.89% to 5.87% the previous week. A year ago, the rate averaged 5.52 percent.
A continued trend in this direction may positively affect the housing market as 2024 gets underway. Recently, elevated mortgage rates and a significant under-supply of homes had led to the slowest-paced market in more than 13 years. Time will tell if lower rates jumpstart our local real estate market, which is seeing significant pent-up buyer demand in the face of continued supply challenges.