Applications for home loans have increased for the first time in a month as home buyers rushed to take advantage of this week’s lower mortgage rates. According to Freddie Mac and the Mortgage Bankers Association, the average for the 30-year fixed-rate mortgage dipped to 7.5%, resulting in a 3% rise in purchase applications for the week. However, despite the increase, purchase applications are still 20% lower than the same week last year. The slight reprieve for mortgage rates is welcome news after reaching 20-year highs, with the 30-year fixed-rate mortgage dropping a quarter of a percent this week, the largest one-week decrease since last November. The spread between mortgage rates and the 10-year Treasury bond remains wider than historical norms, indicating that mortgage rates may have more room to fall in the future. Many aspiring home buyers may be waiting for rates to dip lower, as they are facing a more expensive housing market than last year due to elevated mortgage interest rates and the rise in home prices.
According to Khater, the data indicates that household debt is on the rise, mainly due to mortgage, credit card, and student loan balances. The high cost of living is putting a strain on many consumers, and unless there is a significant decrease in mortgage rates, the housing market will remain stagnant.
Freddie Mac’s latest report reveals the national averages for mortgage rates as of the week ending Nov. 9. The average rate for 30-year fixed-rate mortgages dropped to 7.5% from last week’s 7.76%, while a year ago, it averaged 7.08%. Similarly, the average rate for 15-year fixed-rate mortgages fell to 6.81% from last week’s 7.03%, and a year earlier, it averaged 6.38%.
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