Freddie Mac Mortgage Rates release
Mortgage rates have taken another dip this week, hitting the lowest point since May. According to data from Freddie Mac released on Thursday, the rate on the 30-year fixed mortgage has gone down from 6.67% to 6.61%, marking the ninth consecutive week of rate decreases. Over the past two months, rates have dropped over a full percentage point from October’s 7.79%.
In theory, this recent improvement should bring relief to those looking to buy a home. However, the challenge of limited inventory for existing homes on the market continues to impact affordability. Despite a slight stabilization in the rapid descent of mortgage rates this week, the trend is still downward, as noted by Freddie Mac’s chief economist in a recent statement.
Looking ahead to the new year, the economy remains strong, characterized by solid growth, a tight labor market, decelerating inflation, and a nascent rebound in the housing market. Although the share of affordable housing hit a record low this year, the real estate group anticipates improvement as mortgage rates continue to fall and more homes become available.
Excitingly, mortgage rates are now under 7% for the first time in months. This, coupled with lower rates prompting more people to list their homes, is causing a slowdown in home price growth. Overall inflation is also cooling. As a result, we can expect a surge in home purchases in the new year as buyers seize the opportunity presented by these lower mortgage rates.
It’s important to note that the average mortgage rate is based on data from thousands of lenders nationwide, considering only borrowers with a 20% down payment and excellent credit. Keep in mind that individual buyer rates may vary.
What is Freddie Mac?
Freddie Mac, officially the Federal Home Loan Mortgage Corporation, is a publicly traded, government-sponsored enterprise headquartered in Virginia. Established in 1970, it plays a crucial role in the U.S. mortgage market alongside Fannie Mae. Freddie Mac buys mortgages, bundles them into mortgage-backed securities (MBS), and sells them to private investors, thereby boosting funds for mortgage lending and new home purchases. In 2008, during the financial crisis, the Federal Housing Finance Agency took conservatorship of Freddie Mac due to market turbulence. The U.S. Treasury invested heavily to stabilize the company, acquiring preferred stock worth up to $100 billion. Despite facing significant challenges and a sharp drop in stock value, Freddie Mac, like the broader economy, eventually rebounded. As the housing market and the economy recovered, Freddie Mac became profitable again, illustrating its resilience and importance in facilitating mortgage liquidity and stability in the U.S. housing sector.
Are mortgage rates going down in 2024?
Experts anticipate that mortgage rates will continue to decrease in 2024. The Federal Reserve officials have recently predicted that there will be around three interest rate cuts in the coming year.
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