Mortgage rates eased again for the fourth-straight week but remain almost a full percentage point over last year at this time, a key reason buyers continue to hold back and why the market remains sluggish.
The latest Freddie Mac Primary Mortgage Market Survey® released Thursday shows the average 30-year fixed-rate mortgage rate at 7.11%, down seven bases points from 7.18% last week. The 30-year FRM is still up year-over-year from 6.24% last year. The 15-year FRM averaged 6.45%, down from 6.57%. A year ago at this time, the 15-year FRM averaged 5.49%.
At presstime, the average rate was back up to 7.42% Thursday afternoon, according to Mortgage News Daily.
Bright MLS Chief Economist Lisa Sturtevant said that while rates are at their lowest level since late September, borrowing costs are still nearly a full percentage point higher than they were last year at this time.
“While rates have declined for three weeks in a row, homebuyers are still holding back,” Sturtevant said in a statement. “Higher rates, along with on-going economic uncertainty, are key reasons why housing market activity is so sluggish this fall.
She also said there is little reason to expect rates to come down further this year, and that, given this week’s inflation report, it’s more likely for rates to increase instead.
“So far, we haven’t seen higher rates lead to widespread price declines,” she said. “In fact, home prices are still rising in many local markets. Inventory is rising but higher rates are causing sellers to pause along with buyers. Because both sides of the supply-demand equation are slowing, it’s not likely for home prices to drop significantly even if rates move higher.”
Sturtevant noted that data on pending home sales suggest that sales are going to continue to be anemic in the fourth quarter. “It is very likely we will end 2026 with a total of fewer than 4 million existing home sales for the first time since the 1990s.”
Realtor.com Senior Economist Jiayi Xu added that the recent downtrend trend with rates could potentially reverse next week as the 10-year yield returns to 5%.
“The strong October jobs report showed the labor market holding up well, clearing the way for the Fed’s next rate hike,” Xu said in a statement. “On Tuesday morning, before the CPI release, Fed Governor Christopher Waller said a larger 50-basis-point move should be considered in December’s meeting if inflation came in hot. Shortly afterward, the October CPI report came in hotter than forecast, pushing the 10-year Treasury yield toward 5%. A December hike is now essentially priced in. The debate is no longer if the Fed hikes, but how far and how fast.”
Xu also said today’s homebuyers are being squeezed by both high mortgage rates and high inflation, with inflation being the bigger long-term problem.
“High rates raise monthly payments and shrink the loan a buyer can qualify for, and the recent pullback in pending sales shows how sensitive buyers are,” she said. “But persistent high inflation is what keeps the Fed hiking and rates elevated. Inflation also leaves households with less to put toward a home, especially when wages lag prices. First-time buyers feel it most. With no equity to lean on, they must save a down payment from budgets already stretched thin. Even if rates ease, living costs rising faster than pay will keep weighing on demand for years.”
Read the full Freddie Mac report here.
