30-year mortgage rates are now below 7%

30-year mortgage rates are now below 7%, per MW.

Freddie Mac reported a decrease in the average rate on a 30-year mortgage to 6.95%, down from 7.03% the previous week and compared to 6.31% a year ago. Meanwhile, rates on 15-year fixed-rate mortgages, favored by homeowners refinancing, slightly increased to 6.38% from 6.29% the previous week, still higher than the 5.54% average a year ago.

This marks the seventh consecutive week of declining mortgage rates, aligning with the drop in the 10-year Treasury yield, used by lenders as a pricing guide. The decline in rates is influenced by optimism about easing inflation and potential rate cuts by the Federal Reserve.

As inflation decelerates and the Fed signals a possible rate cut in the coming year, the housing market is expected to gradually improve in the new year, according to Sam Khater, Freddie Mac's chief economist. The recent decline in mortgage rates is viewed positively for homebuyers, contributing to an increase in mortgage applications.

However, despite this improvement, the average rate on a 30-year home loan remains significantly higher than two years ago, impacting the inventory of available homes for sale.