Mortgages are finally getting cheaper: In a welcome development for would-be buyers, last year’s surge in mortgage interest rates is significantly unraveling.
The average rate offered for a 30-year fixed mortgage fell again this week, home loan giant Freddie Mac said Thursday. Rates are now nearly a full percentage point lower than they were at the recent peak of 7.08% in November. The chart below shows how mortgage rates are trending down.
Just as inflation (and the Federal Reserve’s response to it) was responsible for 2022’s relentlessly climbing mortgage rates, the recent lessening of inflation has caused rates to fall. Borrowers have snapped up loans offered at lower rates: Mortgage applications for both purchases and refinancing jumped 28% last week, the Mortgage Bankers Association said.
Mortgage rates hit record lows during the pandemic, but were rapidly driven upward last year by inflation fears— making homebuying far more expensive than it had been and pricing many buyers out of the market.
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