Mortgage rates tick down again, boosting buying activity
Mortgage rates dropped again this week, spurring more potential homebuyers to submit applications as the 2024 buying season wanes.
The average 30-year mortgage rate fell to 6.69%, from 6.81% a week earlier, according to Freddie Mac data. Fifteen-year mortgage rates dropped to an average of 5.96% from 6.1% last week.
“Despite just a modest drop in rates, consumers clearly have responded as purchase demand has noticeably improved," Sam Khater, Freddie Mac’s chief economist, said in a statement. "The responsiveness of prospective homebuyers to even small changes in rates illustrates that affordability headwinds persist.”
Mortgage applications for home purchases rose 6% in the week through Friday, marking the fourth straight week of gains, according to the Mortgage Bankers Association (MBA). The week included an adjustment for the Thanksgiving holiday.
Read more: Mortgage and refinance rates today, Dec. 5, 2024: Lowest rates since October
“The recent strength in purchase activity continues, supported by lower rates and higher inventory levels, which are giving prospective buyers more options compared to earlier in the year,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.
Mortgage rates are the lowest they've been in more than a month, though they remain elevated from year-to-date lows of around 6% in September. But at 6.69%, they're now comfortably below the 7% level that slowed the spring homebuying season and caused some buyers and sellers to pause again in the weeks before the election.
Read more: What first-time homebuyers need to know
The latest decrease mirrors a dip in Treasury yields that underpin mortgage rates. Yields have fallen in recent days as financial markets evaluate President-elect Donald Trump’s final Cabinet appointments for clues about his administration’s priorities.
Jobs data released Friday will provide one more clue as to where mortgage rates are headed before the end of the year. Traders see a 70% chance of the Federal Reserve lowering benchmark interest rates by 25 basis points at its mid-December meeting, according to CME FedWatch. If the labor market looks surprisingly strong, the odds of another cut could shrink, sending mortgage rates higher.
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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