The 30-year fixed-rate mortgage averaged 7.44%, down again from last week’s average of 7.5%, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac released Thursday.
This week’s numbers:
- 30-year fixed-rate mortgage averaged 7.44% as of November 16, 2023, down from last week when it averaged 7.5%. A year ago at this time, the 30-year FRM averaged 6.61%.
- 15-year fixed-rate mortgage averaged 6.76%, down from last week when it averaged 6.81%. A year ago at this time, the 15-year FRM averaged 5.98%.
What the experts are saying:
“For the third straight week, mortgage rates trended down, as new data indicates that inflationary pressures are receding,” said Sam Khater, Freddie Mac’s chief economist. “The combination of continued economic strength, lower inflation and lower mortgage rates should likely bring more potential homebuyers into the market.”
Realtor.com Economist Jiayi Xu commented:
“The Freddie Mac fixed rate for a 30-year mortgage dropped for a third week in a row and declined to 7.44 percent this week, as markets absorbed the latest economic indicators. In October, headline inflation held steady from the previous month, and core inflation, which includes goods and services excluding volatile food and energy, slowed on a monthly basis. Meanwhile, October’s producer price index experienced its largest monthly decline since April 2020, and U.S. retail sales had its first monthly drop in seven months, both encouraging signs of a cooling economy. These data combined with the slowing jobs market data suggest that the Fed’s restrictive monetary policy is passing through to the economy.
“While Chair Powell would not rule out the possibility of another rate hike in December after the November Fed meeting, the Federal Reserve remains committed to being data dependent. Recent incoming data, such as that from this week, is making a rate hike far less likely. Mortgage rates are likely to continue dropping, as they have in recent weeks.
“Despite mortgage rates dropping below 7.5 percent, they remain at nearly multi-decade highs. An unexpected consequence of this heightened rate environment is the surge in down payments, climbing to a new peak in the third quarter of 2023, as reported by Realtor.com. This finding may appear counterintuitive given the deceleration in home price growth over the past year, but elevated mortgage rates could be a key factor contributing to this phenomenon. For example, high mortgage rates could drive buyers to consider larger down payments to minimize the size of their mortgage loan at today’s elevated rates. Realtor.com’s October 2023 estimates reveal that although the median listing price remained unchanged from the previous year, elevated mortgage rates have raised the cost of financing a typical listed home with a 20% down payment by over $166 (or 7.4%) when compared to last year. To maintain the same monthly payment as one year ago, a buyer would need to increase the down payment to 25.5%, requiring an upfront payment of more than $23,300,” Xu concluded.