Mortgage rates this week fell to the lowest levels since September 2022, with the drop coming a week after inflation declined for the sixth month in a row.
The average interest rate on a 30-year fixed-rate mortgage was 6.15% as of Jan. 19, according to Freddie Mac’s weekly Primary Mortgage Market Survey released today. The rate represents a 0.18 percentage point drop from the previous week, and is the lowest rate since Sept. 15.
“As inflation continues to moderate, mortgage rates declined again this week,” Sam Khater, Freddie Mac’s chief economist, said in a statement. The Consumer Price Index last week showed that inflation continued to cool in December. Mortgage rates rose swiftly through 2022 as markets expected the Federal Reserve to act aggressively to control inflation.
So far in 2023, rates have largely retreated, with this week’s average 30-year mortgage rate 0.27 percentage points lower than the last week in 2022 and nearly a percentage point below the 2022 peak of 7.08%.
Lower rates are boosting demand, Khater said. Mortgage applications last week gained ground, with purchase applications climbing about 25% to the highest level since September 2022, according to Mortgage Bankers Association data.
Builder confidence also turned a corner, according to the National Association of Home Builders. The January index reading increased for the first time since December 2021. “Declining rates are providing a much-needed boost to the housing market, but the supply of homes remains a persistent concern,” Khater said.
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