HEAT ALERT

Heat advisory in effect for parts of the Hudson Valley through this evening.

The average long-term US mortgage rate dips below 7% to its lowest level since early August

The average rate on a 30-year mortgage dropped to 6.95% from 7.03% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.31%.

Associated Press

Dec 15, 2023, 1:36 PM

Updated 214 days ago

Share:

The average long-term U.S. mortgage rate dropped below 7% to its lowest level since early August, another boost for prospective homebuyers who have largely been held back by sharply higher borrowing costs and heightened competition for relatively few homes for sale.
The average rate on a 30-year mortgage dropped to 6.95% from 7.03% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.31%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loan, edged up this week, lifting the average rate to 6.38% from 6.29% last week. A year ago, it averaged 5.54%, Freddie Mac said.
The latest drop in rates is the seventh in as many weeks. Mortgage rates have been easing since late October, when they reached 7.79%, the highest level since late 2000.
The pullback has echoed a decline in the 10-year Treasury yield, which lenders use as a guide to pricing loans. The yield, which in mid October surged to its highest level since 2007, has been falling on hopes that inflation has cooled enough for the Federal Reserve to finally stop raising interest rates.
Those hopes strengthened Wednesday after the Fed held its main interest rate steady for the third straight time, and its officials signaled that they expect to begin cutting rates beginning as early as next summer.
Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with its benchmark federal funds rate can influence rates on home loans.
“Given inflation continues to decelerate and the Federal Reserve Board’s current expectations that they will lower the federal funds target rate next year, we likely will see a gradual thawing of the housing market in the new year,” said Sam Khater, Freddie Mac’s chief economist.
The sharp runup in mortgage rates that began early last year has pushed up borrowing costs on home loans, reducing how much would-be homebuyers can afford even as home prices have kept climbing due to a stubbornly low supply of properties on the market. That’s weighed on sales of previously occupied U.S. homes, which are down 20.2% through the first 10 months of this year.
The recent downward shift in mortgage rates is a welcome development for homebuyers. Mortgage applications notched their sixth consecutive weekly increase last week, according to the Mortgage Bankers Association.
Still, the average rate on a 30-year home loan remains sharply higher than just two years ago, when it was 3.12%. 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.


More from News 12
2:40
HEAT ALERT: Feels like upper 90s today, potentially damaging storms return this afternoon

HEAT ALERT: Feels like upper 90s today, potentially damaging storms return this afternoon

2:01
Lake Welsh at Harriman State Park reopens to swimmers after harmful algal bloom closure

Lake Welsh at Harriman State Park reopens to swimmers after harmful algal bloom closure

0:19
Traffic Alert: Northbound I-95 ramp closed overnight for roadwork

Traffic Alert: Northbound I-95 ramp closed overnight for roadwork

0:56
Middletown schools crack down on cellphones, implementing Yondr pouch system

Middletown schools crack down on cellphones, implementing Yondr pouch system

0:24
East Fishkill mourns retired Det. Mark DiDato

East Fishkill mourns retired Det. Mark DiDato

1:28
What's Cooking: Uncle Giuseppe's Marketplace's Italian potato salad

What's Cooking: Uncle Giuseppe's Marketplace's Italian potato salad

0:22
$55 million affordable housing complex opens in Westchester

$55 million affordable housing complex opens in Westchester

1:02
Headlines: Head-on crash sentencing, Poughkeepsie burglaries, arrest in metal pipe attack

Headlines: Head-on crash sentencing, Poughkeepsie burglaries, arrest in metal pipe attack

0:26
Off-duty officer rescues 2-year-old from Monticello pool, earns department honor

Off-duty officer rescues 2-year-old from Monticello pool, earns department honor

0:19
Allegiant Air adds Fort Lauderdale flight from Stewart International

Allegiant Air adds Fort Lauderdale flight from Stewart International

0:16
Police: Man shot in leg in Yonkers, no arrests yet

Police: Man shot in leg in Yonkers, no arrests yet

0:34
TSA PreCheck is now coming to Westchester County Airport for a limited time

TSA PreCheck is now coming to Westchester County Airport for a limited time

2:01
State senator renews push to address extreme heat in prisons

State senator renews push to address extreme heat in prisons

1:48
Veterinarian offers tips on how to keep your pets cool amid blazing temps

Veterinarian offers tips on how to keep your pets cool amid blazing temps

0:42
Edgemont supporters push for vote on village status in Greenburgh

Edgemont supporters push for vote on village status in Greenburgh

0:47
Secret Service director with Westchester ties faces scrutiny after Trump shooting

Secret Service director with Westchester ties faces scrutiny after Trump shooting

1:57
City leaders move ahead with 'landmark status' for historic Yonkers church

City leaders move ahead with 'landmark status' for historic Yonkers church

0:25
Two new restaurants open in Haverstraw

Two new restaurants open in Haverstraw

0:39
Middletown man killed in police-involved shooting in Sullivan County

Middletown man killed in police-involved shooting in Sullivan County

1:38
‘We are seeing real pain.’ Kingston nonprofit struggles to help growing number of homeless in Kingston during extreme heat and severe storms

‘We are seeing real pain.’ Kingston nonprofit struggles to help growing number of homeless in Kingston during extreme heat and severe storms