Bloomberg – U.S. mortgage rates continued to decline, ending the year at their lowest level since May.
The average 30-year fixed loan was 6.61%, up from 6.67% last week, Freddie Mac said Thursday in a statement.
Many industry observers are optimistic that the continued decline in borrowing costs — from a peak of 7.79% in late October — will spur new homebuying demand in the coming months as a season of greater market activity begins. However, homes for sale remain scarce, prices remain out of reach for a large number of Americans, and 30-year mortgage rates are more than double 2022 levels, all of which suggest the recovery may be slow and difficult.
The National Association of Realtors reported Thursday that a measure of existing home contracts remained at a record low in November.
The Federal Reserve has signaled its willingness to consider cutting its benchmark interest rate in the new year if inflation cooperates. Mortgage loans should follow, easing the burden on home seekers.
“The rapid decline in mortgage interest rates over the past two months has stabilized somewhat this week, but rates continue their downward trend.” “Looking into the new year, the economy remains strong with solid growth, a tight labor market, slowing inflation, and an emerging recovery in the housing market,” Sam Khater, chief economist at Freddie Mac, said in the statement.
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