Mortgage rates dropping below 7% caused a rise in mortgage applications since it is the first drop since mid-August.
Despite the mortgage dropping below 7%, the housing market may not improve quickly due to low inventory. (Photo: Investopedia)
Mortgage Rates Dropping Below 7%
In the United States, mortgage rates dropping below 7% is a shock since it is the first time since mid-August. The mortgage rates dropping below 7% is the seventh consecutive week of rate declines, attributed to improving inflation and the Federal Reserve’s decision to pause rate increases.
In line with the mortgage rates dropping below 7%, the average 30-year fixed-rate mortgage rate in the week ending December 14 was 6.95%, down from 7.03% the previous week and 6.31% a year ago. Experts predict that the mortgage rates dropping below 7% is just the start as the Fed signals possible rate cuts in 2024.
According to a published article by CNN, the mortgage rates dropping below 7% has led to a rise in mortgage applications, indicating increased buyer demand. However, despite the mortgage rates dropping below 7%, the housing market may not heat up quickly due to persistently low inventory.
Relief For Home Loan Borrowers
In a published article by Investopedia, the average mortgage rate for a 30-year mortgage has dropped to 6.95% this week, providing some relief for home loan borrowers.
This has boosted expectations for further rate cuts next year. The decline in mortgage rates may stimulate activity in the housing market, which has been sluggish due to high mortgage rates and prices. Experts predict a gradual improvement in the housing market next year.
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