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Mortgage rates dropped again this week after reaching 20-year highs recently, and economists predict they are likely to continue to decline through the spring homebuying season. The 30-year fixed-rate mortgage averaged 7.44% this week, backing further away from its near-8% high, Freddie Mac reports.
“The three-week drop is a steady sign we likely have hit a peak and are headed south for mortgage rates, especially as the 10-year Treasury continues to fall from its peak,” says Jessica Lautz, deputy chief economist at the National Association of REALTORS®.
NAR Chief Economist Lawrence Yun predicts more favorable rates for home buyers are on the horizon. During this week’s NAR NXT, The REALTOR® Experience, in Anaheim, Calif., Yun forecasted that the 30-year fixed-rate mortgage will drop to the 6% to 7% range by spring.
Nevertheless, home buyers may want to take advantage now of the falling rates. “As rates continue the expected decline, this might be a calmer season to home shop before rates fall into the 6% range in spring and pent-up demand floods into the market,” Lautz says.
The combination of continued economic strength, lower inflation and lower mortgage rates will likely bring more potential home buyers into the market, adds Sam Khater, Freddie Mac’s chief economist.
Freddie Mac reports the following national averages with mortgage rates for the week ending Nov. 16:
- 30-year fixed-rate mortgages: averaged 7.44%, falling from last week’s 7.5% average. A year ago, 30-year rates averaged 6.61%.
- 15-year fixed-rate mortgages: averaged 6.76%, dropping from last week’s 6.81% average. Last year at this time, rates averaged 5.98%.
