Residential News » Washington D.C. Edition | By Monsef Rachid | January 20, 2023 8:23 AM ET
But still double mortgage rates from just 12 months ago
Freddie Mac's latest Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage in the U.S. averaged 6.15 percent in mid-January 2023.
"As inflation continues to moderate, mortgage rates declined again this week," said Sam Khater, Freddie Mac's Chief Economist. "Rates are at their lowest level since September of last year, boosting both homebuyer demand and homebuilder sentiment. Declining rates are providing a much-needed boost to the housing market, but the supply of homes remains a persistent concern."
Freddie Mac Rate Facts
Nadia Evangelou, the National Association of Realtors senior economist and director of real estate research also comments, "Mortgage rates continued their downward trek this week. According to Freddie Mac, the rate on a 30-year fixed mortgage dropped to 6.15% from 6.33% the previous week. With inflation declining and the Fed switching to a smaller rate hike, mortgage rates may drop even further in the upcoming weeks".
Evangelou continued, "The fall in mortgage rates creates opportunities for many buyers. A lower mortgage rate brings down the monthly payment. Since rates' recent peak in the middle of November, buyers can save about $300 every month with rates near 6%. At the same time, data shows that sellers are more willing to negotiate as homes stay on the market longer. Sellers had to reduce their initial asking price by 12% on average for sold properties listed for more than 30 days. Price cuts reached 15% when properties stayed on the market for more than 4 months. In the meantime, there are fewer offers per listing. The typical seller receives a couple of offers for their home compared to 4 offers the previous year when buyers were rushing to benefit from the 3% historic low rates. However, buyers are still dealing with weak affordability and low inventory. Buyers earning $100,000 can currently afford to buy a home with a price of up to $380,000. But only 40% of the listings are in their price range. A year ago, these same buyers could afford to buy a home that was $130,000 more expensive."