Mortgage rates ticked up ever so slightly this week, kicking off 2024 by taking a breather from the previous nine weeks of consecutive declines.
The 30-year fixed-rate mortgage averaged 6.62% in the week ending January 4, up from 6.61% the previous week, according to data from Freddie Mac released Thursday. A year ago, the average 30-year fixed-rate was 6.48%.
Despite the tiny increase, mortgage rates have fallen for the past few months, improving affordability for homebuyers who’ve been struggling in one of the least affordable homebuying markets in decades.
After reaching a 23-year high of 7.79% at the end of October, mortgage rates have been brought down more than a full percentage point by the anticipation of Federal Reserve rate cuts in 2024.
Since the last Fed meeting in mid-December, rates have remained relatively flat as markets digest inflation data, Sam Khater, Freddie Mac’s chief economist, said in a press release.
“Given the expectation of rate cuts this year from the Federal Reserve, as well as receding inflationary pressures, we expect mortgage rates will continue to drift downward as the year unfolds,” Khater said.
While lower mortgage rates are welcome news, potential homebuyers are still dealing with the dual challenges of low inventory and high home prices that continue to rise, he added.
The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit. A current buyer’s rate may be different.
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