By Amina Niasse
NEW YORK (Reuters) - Mortgage rates fell to a six-month low this week to the lowest figure since June, indicating relief has come to prospective buyers on the back of a rallying bond market.
The average fixed-rate 30-year mortgage fell to 6.67% as of Thursday from 6.95% the week prior, according to a report released by Freddie Mac.
“The 30-year fixed-rate mortgage remained below seven percent for the second week in a row, a welcome downward trend after 17 consecutive weeks above seven percent,” said Sam Khater, Freddie Mac’s chief economist. “Lower rates are bringing potential homebuyers who were previously waiting on the sidelines back into the market and builders already are starting to feel the positive effects."
Mortgage rates have steadily risen since 2022, following the Federal Reserve’s aggressive rate hike campaign. After the Fed maintained its policy benchmark for three consecutive meetings, expectations of its cycle coming to a close have pushed yields on mortgage backed securities down, and rates have eased from two-decade highs in October that neared 8%.
High interest rates created a staring contest this year between buyers and sellers, dissuading homeowners locked into cheaper rates from selling and pricing out prospective buyers. Softening mortgage rates have drawn some sellers from the sidelines, with existing home sales increasing by an unexpected 0.8% in November after a five-month stretch of decline, according to a National Association of Realtors report released Wednesday.