Mortgage rates fall for third consecutive week to average 6.6%
Mortgage rates dropped for the third consecutive week after fresh economic data kept expectations about the Federal Reserve’s next interest rate cut intact.
The average 30-year mortgage rate fell to 6.6% in the week through Wednesday, compared with 6.69% a week earlier, according to Freddie Mac data. Average 15-year mortgage rates also dropped to 5.84%, from 5.96%.
“The combination of mortgage rate declines, firm consumer income growth, and a bullish stock market have increased homebuyer demand in recent weeks,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “While the outlook for the housing market is improving, the improvement is limited given that homebuyers continue to face stiff affordability headwinds.”
The gradual drift lower in rates has reopened refinancing opportunities for some buyers. Mortgage refinancing applications surged 27% through Friday compared to a week earlier, which included an adjustment for the Thanksgiving holiday, according to the Mortgage Bankers Association.
Read more: Mortgage and refinance rates today, Dec. 12, 2024: 30-year rates drop for 3rd consecutive week
Applications for mortgages to purchase homes fell 4% in the same time period after several weeks of gains.
November’s Consumer Price Index data, released on Wednesday, showed that prices increased 2.7% in the last year, broadly in line with expectations. Wholesale inflation jumped 3% in the 12 months through November, driven in part by surging egg prices.
Though both data points accelerated from October, the data cemented traders’ expectations that the Fed will drop benchmark interest rates at its meeting next week. Markets see a 98% chance of a 25-basis-point cut on Dec. 18, according to CME FedWatch.
Although the Fed doesn’t directly control mortgage rates, they move in part based on expectations about the future direction of benchmark interest rates.
Read more: How the Federal Reserve rate decision affects mortgage rates
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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