Ho!-Ho!-Ho! Lower Mortage Rates for The Holidays!

Mortgage rates stayed below 7% for the second week in a row.

The 30-year, fixed mortgage rate averaged 6.67% for the week ending Dec. 21, according to Freddie Mac‘s Primary Mortgage Market Survey. That’s down from last week’s 6.95% and up from 6.27% the same week a year ago. Meanwhile, HousingWire’s Mortgage Rates Center showed Optimal Blue’s average 30-year fixed rate on conventional loans at 6.68% on Thursday. 

“Lower rates are bringing potential homebuyers who were previously waiting on the sidelines back into the market and builders already are starting to feel the positive effects,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “A rise in homebuilder confidence, followed by new home construction reaching its highest level since May, signals a response to meet heightened demand as current inventory remains low.”

Lower rates will have a positive impact on affordability, Lisa Sturtevant, chief economist at Bright MLS, said in a statement. Bright MLS forecasts the average on a fixed-rate mortgage rate to fall to 6.5% by mid-year and to decline further to 6.2% by the end of next year. With a rate of 6.2%, the typical monthly payment on a loan for a $400,000 home would be about $2,700, down from $3,000 with a 7.5% rate.

Locally, we have seen rates as low as 6.625% PAR for top tier borrowers on a 30 year loan and properly qualified borrowers could buy down to 5.99% for less than 2 points.  To put this in perspective, 45 days ago mortgage rates were sitting at roughly 8% for top tier borrowers, on a 500k mortgage this equates to $467/mo lower payments now compared to 45 days ago.

Gena Glaze