Mortgage Rates Drop Sixth Week, Bringing Relief to Homebuyers

Mortgage rates have dropped for the sixth week in a row, bringing relief to homebuyers who are eager to purchase a home.

This is great news for those who have been waiting to buy a home, as lower mortgage rates can save them thousands of dollars in interest payments over the life of the loan.

The drop in mortgage rates has made it a more affordable time to buy a home, with some mortgage rates falling to their lowest levels in over a year.

Mortgage rates have been dropping for six weeks now, and it's great news for those looking to buy or refinance a home. The national average for 30-year new purchase mortgages has shed 17 basis points over the last four market days, lowering the average to 6.62%.

This is the cheapest level in more than six weeks, and it's a welcome relief after rates climbed to a four-month high of 6.93% in November. However, it's still more than 70 basis points above the Sept. 17 low point of 5.89%.

Consider reading: Mortgage Rates in the Us Reach an Eight-week High

For those with jumbo loans, rates have actually inched up 2 basis points to 6.65%, but that's still well below a recent three-month high of 6.99%. Jumbo 30-year mortgage rates were at their cheapest in 19 months back in September, with an average of 6.24%.

The decline in mortgage rates is reflected across various loan categories, including 30-year fixed-rate mortgages with conforming loan balances, which have dropped from 6.43% to 6.29%. FHA-backed loans have also seen a slight decline, from 6.30% to 6.24%.

Here's a breakdown of the national averages of lenders' best rates for new purchase mortgages:

The Fed's next rate announcement will be made on Dec. 18, so it's worth keeping an eye on the market in the coming weeks.

Mortgage rates have been on a downward trend for six weeks, with the average 30-year fixed-rate mortgage falling to 6.62%. This is the lowest level in more than six weeks.

Expand your knowledge: Mortgage Rates Have Dropped after Four Weeks of Increases

The decline in mortgage rates is attributed to cooling inflation, a slowing labor market, and anticipation of a potential rate cut from the Federal Reserve later this month. The Fed's next rate announcement will be made on Dec. 18.

Rates on 30-year new purchase mortgages have shed 17 basis points over the last four market days, taking the average to 6.62%. This is a significant drop, especially considering that rates were at a four-month high of 6.93% in November.

The Mortgage Bankers Association's (MBA) Weekly Applications Survey for the week ending September 6, 2024, showed a modest increase in mortgage applications as homebuyers and refinancers responded to falling mortgage rates. The Market Composite Index, a measure of overall mortgage application volume, rose 1.4% from the previous week.

Here's a breakdown of the average rates for different loan types:

Refinances have surged, with a 1% increase from the previous week and a 106% higher than the same week a year ago. However, the overall refinance potential remains limited due to many homeowners already locked into rates below 5%.

Mortgage rates have been on a downward trend for the sixth week in a row, and it's having a significant impact on monthly payments. The national average rate for 30-year fixed mortgages has dropped to 6.62%, which is 17 basis points lower than the previous four market days.

This decline in rates is translating into lower monthly payments for borrowers. For a $200,000 loan, the monthly payment for a 30-year fixed mortgage has decreased by $20. For a $300,000 loan, the payment has dropped by $30, and for a $400,000 loan, it's $40 lower.

The same trend is observed for 15-year fixed mortgages, with a $200,000 loan seeing a $11 decrease in monthly payment, and a $300,000 loan experiencing a $16 decrease.

Here's a breakdown of the monthly payment changes for different loan amounts:

Jumbo 30-year mortgages, with loan amounts ranging from $800,000 to $1.2 million, have seen a decrease in monthly payments as well, ranging from $32 to $48 per month.

The decline in rates is also being reflected in the loan activity, with a shift towards fixed-rate products. The ARM share of mortgage activity has fallen to 5.4% of total applications, as borrowers opt for fixed-rate loans in a falling rate environment.

Curious to learn more? Check out: Us Mortgage Rates Impact Activity

Mortgage rates have dropped for the sixth week in a row, presenting a great opportunity for borrowers to save on their financing costs.

The Federal Reserve's potential rate cut is a significant factor in this trend, as it's expected to lead to even lower mortgage rates.

Borrowers can benefit from more affordable financing options, making it a good time to consider purchasing or refinancing a home.

Affordability and inventory challenges will still play a role in shaping the housing market, but the current rate environment is a silver lining.

In the coming weeks, buyers and refinancers may have a window of opportunity to lock in more favorable rates.

If this caught your attention, see: Family Opportunity Mortgage Rates