Mortgage rates in the US faced the biggest weekly decline in nearly 41 years, providing some relief after a rapid run-up that quickly priced out homebuyers.
The average rate for a 30-year fixed mortgage was 6.61%, the lowest level in almost two months, Freddie Mac said in a statement Thursday. Last week, the average was 7.08%.
The results reflect a change in Freddie Mac’s methodology that the company says will provide a broader, more accurate view of the mortgage market. Instead of surveying lenders, it now uses data collected by its automated underwriting system to calculate average rates.
Borrowing costs tracked a decline in yields for 10-year Treasuries after the government reported last week that inflation eased in October. Investors are viewing the consumer-price data as a sign that the Federal Reserve may begin to temper its interest-rate hikes in the coming months. Fed Chair Jerome Powell, however, has said it’s premature to consider a pause.
“Mortgage rates tumbled this week due to incoming data that suggests inflation may have peaked,” said Sam Khater, Freddie Mac’s chief economist. “While the decline in mortgage rates is welcome news, there is still a long road ahead for the housing market. Inflation remains elevated, the Federal Reserve is likely to keep interest rates high and consumers will continue to feel the impact.”
