By Amina Niasse
NEW YORK (Reuters) – U.S. mortgage rates fell this week to the lowest since May 2023, Freddie Mac reported on Thursday, providing a possible boost to buyer traffic in the housing market.
The average fixed-rate 30-year mortgage fell to 6.60% as of Thursday from 6.66% the week prior, Freddie Mac said in its weekly report on home loan borrowing costs.
“This is an encouraging development for the housing market and in particular first-time homebuyers who are sensitive to changes in housing affordability,” Sam Khater, Freddie Mac’s chief economist, said. “However, as purchase demand continues to thaw, it will put more pressure on already depleted inventory for sale.”
Mortgage rates began easing from two-decade highs during the fourth quarter after the Federal Reserve left its policy benchmark unchanged for three consecutive meetings. The Fed’s pivot away from rate hikes stoked a rally in the bond market, driving yields on mortgage-backed securities down.
High interest rates discouraged homeowners from selling last year, shortening inventory and pricing out prospective buyers. Buyers may be leaving the sidelines as rates ease, with mortgage applications increasing 10% for the week ended Jan. 12, the Mortgage Bankers Association said.
(Reporting by Amina Niasse; editing by Barbara Lewis)