Federal Reserve may finally be done raising interest rates in its bid to tame lower inflation.
it reached 7.79%, the highest level on records going back to late 2000.
The recent downward shift in mortgage rates is a welcome development for prospective homebuyers facing a housing market that remains unaffordable to many Americans.
While sales of previously occupied US homes are down 20.2% through the first 10 months of this year, home prices have kept climbing amid a stubbornly low supply properties on the market.
But as mortgage rates ease, they boost borrowers’ purchasing power, increasing how much home they can afford.
Still, the average rate on a 30-year home loan remains sharply higher than just two years ago, when it was 3.10%.
The large gap between rates now and then is contributing to the low inventory of homes for sale by discouraging homeowners who locked in rock-bottom rates two years ago from selling.
So far, the pullback in rates has spurred a pickup in demand for home loans.
Mortgage applications notched their fifth consecutive weekly increase last week, according to the Mortgage Bankers Association.
Several housing economists are projecting that mortgage rates will continue to ease in 2024, though the forecasts call for the average rate on a 30-year home loan to remain above 6%, still about double what the average rate was just two years ago.
Source: nypost.com