![]() “Given inflation continues to decelerate and the Federal Reserve Board’s current expectations that they will lower the federal funds target rate next year, we likely will see a gradual thawing of the housing market in the new year,” said Sam Khater, Freddie Mac’s chief economist. Treasurys and what the Fed does with its benchmark federal funds rate can influence rates on home loans. ![]() ![]() Investors’ expectations for future inflation, global demand for U.S. Those hopes strengthened Wednesday after the Fed held its main interest rate steady for the third straight time, and its officials signaled that they expect to begin cutting rates beginning as early as next summer. The yield, which in mid October surged to its highest level since 2007, has been falling on hopes that inflation has cooled enough for the Federal Reserve to finally stop raising interest rates. The pullback has echoed a decline in the 10-year Treasury yield, which lenders use as a guide to pricing loans. Mortgage rates have been easing since late October, when they reached 7.79%, the highest level since late 2000. The latest drop in rates is the seventh in as many weeks. A year ago, it averaged 5.54%, Freddie Mac said. A year ago, the rate averaged 6.31%.īorrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loan, edged up this week, lifting the average rate to 6.38% from 6.29% last week. The average rate on a 30-year mortgage dropped to 6.95% from 7.03% last week, mortgage buyer Freddie Mac said Thursday. mortgage rate dropped below 7% to its lowest level since early August, another boost for prospective homebuyers who have largely been held back by sharply higher borrowing costs and heightened competition for relatively few homes for sale.
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