Mortgage rates headed lower this week as the 10-year Treasury yield dropped below 4.3% for the first time since September, according to new data from Freddie Mac.
The 30-year, fixed mortgage rate averaged 7.22% for the week ending Nov. 30, according to Freddie Mac‘s Primary Mortgage Market Survey. That’s down significantly from last week’s 7.29% and up from 6.49% the same week a year ago.
Meanwhile, HousingWire’s Mortgage Rates Center showed Optimal Blue’s average 30-year fixed rate on conventional loans at 7.1% on Thursday.
“The current trajectory of rates is an encouraging development for potential homebuyers, with purchase application activity recently rising to the same level as mid-September when rates were similar to today’s levels,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
“The modest uptick in demand over the last month signals that there will likely be more competition in a market that remains starved for inventory.”
Despite the Federal Reserve’s mixed signals about rate hikes, many investors believe that the Fed won’t hike rates at the next Federal Open Markets Committee meeting on Dec. 13, especially as better-than-expected economic readings come in.
The CME FedWatch Tool showed a 95.6% chance the Fed will stay put at its next meeting.
Bright MLS’ 2024 forecast indicates that mortgage rates will fall to 6.5% by the second quarter of 2024. Meanwhile, inventory will also increase by more than 14% by the end of Q2.
However, Realtor.com’s forecast doesn’t anticipate inventory struggles to ease in 2024. It predicts that mortgage rates will remain elevated, at 6.8%, dampening home sales in the new year.