Mortgage rates have fallen to 5.99%, the lowest in five months
According to the most recent Mortgage News Daily data, the average rate on a 30-year fixed-rate mortgage has dropped to 5.99%. This is the first time the rate has reached a “five handle” value since September.
The rate began this week at 6.21% and fell significantly on Wednesday. What caused this significant drop? It all started when Federal Reserve Chairman Jerome Powell changed his stance on inflation. It “has eased somewhat but remains elevated,” he said, sending bond yields lower. And, as you are probably aware, mortgage rates tend to track the 10-year Treasury yield.
Mortgage rates, according to Matthew Graham, chief operating officer at Mortgage News Daily, can continue to fall into the 5% range as long as economic and inflation data support it. However, he does not believe they will fall below 4% anytime soon.
Mortgage rates have been falling for a long time. The 30-year fixed-rate mortgage peaked in October at 7.37% and has since been declining. This is good news for prospective homebuyers because the monthly payment on a $400,000 home with a 20% down payment is now $293 less than it was in October.
And it appears that lower interest rates are already having a positive effect on the housing market. In December, pending home sales, which measure signed contracts on existing homes, increased for the first time in six months. Furthermore, homebuilder stocks have been rising since mortgage rates began to fall, and both PulteGroup and D.R. Horton, the country’s largest homebuilder, reported renewed buyer interest in December, owing to lower mortgage rates.
if you’re in the market for a new home, now might be the time to start shopping!