Mortgage rates dip after two-week climb
The 30-year fixed-rate mortgage stands at 6.33%
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Mortgage rates fell for the first time in three weeks.
The 30-year fixed-rate mortgage averaged 6.33%, down from 6.48% last week, according to mortgage buyer Freddie Mac. A year ago, the 30-year FRM averaged 3.45%.
The 15-year fixed-rate mortgage averaged 5.52%, down from last week when it averaged 5.73%. A year ago, the 15-year FRM averaged 2.62%.
"While mortgage rates have resumed their decline, the market remains hypersensitive to rate movements, with purchase demand experiencing large swings relative to small changes in rates," said Sam Khater, Freddie Mac’s Chief Economist. "Over the last few weeks latent demand has been on display with buyers jumping in and out of the market as rates move."
Federal Reserve Chair Jerome Powell participates in a panel during a Central Bank Symposium at the Grand Hotel in Stockholm, Sweden, Jan. 10, 2023. (Claudio Bresciani/TT News Agency via AP / AP Images)
At its final meeting of 2022, the Federal Reserve raised its rate 0.50 percentage points, its seventh increase last year. That pushed the central bank’s key rate to a range of 4.25% to 4.5%, its highest level in 15 years.
The Fed is expected to raise the federal funds rate again when its policy-setting Federal Open Market Committee concludes a two-day meeting on Feb. 1. Fed officials have signaled that they may raise the central bank's main borrowing rate another three-quarters of a point in 2023, which would be in a range of 5% to 5.25%.
Fed officials will weigh the latest read on inflation.
A report Thursday on consumer prices showed that inflation at retail-level eased to 6.5% in December — a sixth straight monthly decline.
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Newly constructed home for sale, Pine Hill, N.J., Jan. 7, 2023. (Fox News)
The big increase in mortgage rates during the past year has tripped up the housing market, with sales of existing homes falling for 10 straight months to the lowest level in more than a decade.
Though home prices have retreated as demand has declined, they are still nearly 11% higher than a year ago. Higher prices and a doubling of mortgage rates have made homebuying much less affordable for many people.
Rates for 30-year mortgages usually track the moves in the 10-year Treasury yield, which lenders use as a guide to pricing loans. Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Federal Reserve does with interest rates can also influence the cost of borrowing for a home.
The Associated Press contributed to this report.
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