Good news for those in the race for a home—according to Freddie Mac’s latest Primary Mortgage Market Survey, the standard 30-year fixed-rate mortgage now averages 6.09%, down nearly a full point from November when it hit just over 7%.
“Mortgage rates inched down again, with the 30-year fixed-rate down nearly a full point from November, when it peaked at just over 7%,” said Sam Khater, Freddie Mac’s Chief Economist. “According to Freddie Mac research, this one percentage point reduction in rates can allow as many as three million more mortgage-ready consumers to qualify and afford a $400,000 loan, which is the median home price.”
By the numbers, a 30-year fixed-rate mortgage averaged 6.09% as of Feb. 2, 2023, down from last week when it averaged 6.13%. A year ago at this time, the 30-year mortgage averaged 3.55%. A 15-year fixed-rate mortgage averaged 5.14%, down from last week when it averaged 5.17%. A year ago at this time, the 15-year mortgage averaged 2.77%.
“An improving inflation picture, which led to a smaller increase to the Federal funds rate, has also led to lower mortgage rates. With the widespread consensus that inflation is on a downward trend, investors sent the yield on the 10-year Treasury lower,” Sturtevant said. “Mortgage rates tend to move with the yield on the 10-Year Treasury and the average rate on a 30-year fixed rate mortgage fell from a week ago and is at its lowest level since the second week of September. The drop in rates means that the typical monthly payment for a home buyer has fallen by $100 since the beginning of January.”
“While there are predictions that mortgage rates could fall to as low as 5% by the end of the year, rates likely will stabilize between 6% and 6.5% through the spring,” Sturtevant said. “This has been enough to bring eager buyers back to the market, with home showings and new purchase contracts rising in many markets at the end of January.”
Click here to see a spreadsheet of Freddie Mac’s data on mortgage rates going back to 1971.