The average rate for a 30-year fixed-rate mortgage fell to 6.33% for the week ending Jan. 12, according to Freddie Mac’s Primary Mortgage Market Survey. This was a decrease from the previous week when it averaged 6.48% but remains significantly higher than last year when it was 3.45%.
The average rate for a 15-year mortgage was 5.52% last week, down from 5.73% the week before and up from 2.62% last year.
Mortgage rates have fluctuated in the 6% to 7% range since September, Freddie Mac's data shows. Even though the changes are incremental from week-to-week, the changes are impacting purchase demand, according to Freddie Mac Chief Economist Sam Khater.
As inflation cools, the housing market faces other challenges
The latest inflation figures could tip the Federal Reserve to adopt less restrictive interest rate increases as the year advances. Still, the mortgage rates and buyers face other challenges, according to Ratiu.
The Consumer Price Index (CPI), a measure of inflation, rose 6.5% year-over-year in December, a slowdown from the 7.1% increase in November. On a monthly basis, inflation fell 0.1% after increasing by that same amount in November, the BLS said. And while the drop is encouraging, there is evidence that consumers are increasingly borrowing money to make ends meet.
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