Mortgage rates fell slightly this week, as a smaller rate hike by the Federal Reserve signaled promising improvement on inflation.
The 30-year fixed-rate mortgage averaged 6.09% in the week ending February 2, down from 6.13% the week before, according to data from Freddie Mac released Thursday.
A year ago, the 30-year fixed-rate was 3.55%.
After climbing for most of 2022, spurred by the Fed’s harsh interest rate hikes to tame soaring inflation, mortgage rates have been trending downward since November, alongside data that continues to show inflation may have peaked.
Mortgage rates have not been this low since September and are now nearly a full point below last year’s peak of 7.08%, last reached in early November.
“This one percentage point reduction in rates can allow as many as three million more mortgage-ready consumers to qualify and afford a $400,000 loan, which is the median home price,” said Sam Khater, Freddie Mac’s chief economist.
The Fed approved a quarter-point interest rate hike on Wednesday, the smallest since March. The move to slow the pace of increases sends a clear signal that the central bank is seeing progress in its battle with inflation.Mortgage rates fall for fourth week in a row | CNN Business
The markets never cease to throw little surprise parties.