Mortgage rates dropping as interest hikes could soon slow: Freddie Mac

The average 30-year mortgage rate decreased this week for the third consecutive week as markets gain confidence that interest rate spikes will slow in 2023, according to a new report by Freddie Mac. 

The average 30-year fixed-rate mortgage rate was 6.49% for the week ending Dec. 1, 2022, down from the previous week's 6.58%, according to Freddie Mac's Primary Mortgage Market Survey.

The average 15-year fixed-rate mortgage averaged 5.76%, down from the previous week when it averaged 5.9%.

"Mortgage rates continued to drop this week as optimism grows around the prospect that the Federal Reserve will slow its pace of rate hikes," Freddie Mac Chief Economist Sam Khater said in a statement.  "Even as rates decrease and house prices soften, economic uncertainty continues to limit homebuyer demand as we enter the last month of the year."

The U.S. could dip into a recession during the first quarter of 2023, according to the latest Bank of America forecast. And while inflation growth has cooled, the Mortgage Bankers Association (MBA) said inflation may not reach the Fed’s target rate of 2% until 2024. 

The Consumer Price Index (CPI), a measure of inflation, increased 7.7% annually in October, a drop from the 8.2% increase in September. However, that’s still near the 9.1% 40-year high of earlier this year. With inflation continuing to run higher than average, the Federal Reserve is likely to continue raising interest rates next year, although the pace of increases could slow.

If you want to take advantage of today’s interest rates before they potentially increase, consider refinancing your loan to lower your monthly payment. Visit Credible to find your personalized rate without affecting your credit score. 

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Home de-listings hit record high

Amidst high home prices, a record 2% of U.S. homes for sale were delisted each week on average in the 12 weeks ending Nov. 20, compared with 1.6% last year, according to a new report by Redfin. 

The real estate brokerage notes that sellers are taking their homes off the market because they’re often not getting offers for the price they were seeking or no offers at all. Redfin attributes this to rising mortgage rates and persistently high home prices. 

"Some sellers are having a hard time grasping that we’re not in a housing-market frenzy anymore—it’s tough for them to swallow that they missed the boat on getting a high price," Heather Kruayai, a Redfin real estate agent in Jacksonville, FL said in the report. "By the time sellers realize their listing was priced too high, it has already been on the market for too long and is considered stale. I recently had two sellers take their homes off the market after 45-plus days."

If you’re struggling in the current economy, consider refinancing your mortgage into a lower rate to lower monthly payments. Visit Credible to speak with a refinancing expert and see if this option is right for you. 

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Home price increases are slowing down 

Despite the current environment of growing home prices, the rate of growth is beginning to slow, according to CoreLogic. 

Year-over-year home price appreciation slowed to 13.5% in August, marking the fourth consecutive month of lower annual growth, according to the latest CoreLogic Home Price Index. The firm expects annual U.S. home price growth to continue slowing down during the next 12 months to 3.9% by September 2023.

"The rapid increase in prices during the COVID-19 pandemic caused many U.S. housing markets to reach completely unaffordable levels for potential local homebuyers," Selma Hepp, CoreLogic interim lead of the office of the chief economist, said in a statement. "On the West Coast and in Mountain-West states, home prices are slowing from this spring’s high but remain elevated from a year ago. 

"By contrast, markets that continue to see an in-migration of higher-income households are still experiencing home price gains that are notably higher than the national rate of appreciation," Hepp said.

If you’re interested in taking advantage of mortgage rates while they are lower, you could consider refinancing your home loan. Visit Credible to compare multiple mortgage lenders at once and choose the one with the best option for you. 

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