Interest rates tick downward but are still volatile
It's too soon to call it a trend, but the slight downtick in mortgage rates may give hope to potential buyers.
Key points:
- The 30-year rate hit 6.58%, down from 6.61% the week before.
- Earlier this month the rate was above 7%, sending buyers and sellers to the sidelines.
Mortgage rates dropped slightly heading into the Thanksgiving holiday, but it's showing more volatility than a sustained downward trend.
Freddie Mac announced the 30-year fixed-rate mortgage was 6.58%, down from 6.61% the week before. The rate was above 7% earlier this month before dropping a half a percentage point. It was only a few months ago that the rate started to climb sharply, significantly slowing down real estate activity.
"This volatility is making it difficult for potential homebuyers to know when to get into the market, and that is reflected in the latest data which shows existing home sales slowing across all price points," said Sam Khater, Freddie Mac's Chief Economist.
Just a year ago the rate was 3.1%. After years of very low interest rates, the current elevated level has deterred not only buyers, but has made homeowners — particularly those who want to buy another house — reluctant to sell because their new mortgage payments would be much higher. As a result, new mortgage loans in the third quarter were at the lowest levels in more than 20 years, according to ATTOM.
The 15-year fixed-rate mortgage averaged 5.90%, down from last week's average of 5.98%. A year ago at this time, the 15-year FRM averaged 2.42%.
The rate is determined by the Primary Mortgage Market Survey, which focuses on conventional home purchase loans for borrowers who put 20% down and have excellent credit.