Mortgage rates moved down again, further backing away from the 8% mark it previously threatened, as the benchmark 10-year Treasury has dropped over 50 basis points in the past month.
The Freddie Mac Primary Mortgage Market Survey, released a day early due to the Thanksgiving holiday, found the 30-year fixed rate loan dropped 15 basis points as of Nov. 22 compared with the previous week, to 7.29% from 7.44%; for the same week last year the rate averaged 6.58%.
At the same time, the 15-year FRM fell to 6.67% from 6.76% from the prior week, but was up from 5.9% a year ago.
The 10-year Treasury yield as of noon on Wednesday was at 4.42% from an intraday high of 4.98% on Oct.25. Furthermore, spreads have not narrowed, remaining close to 300 basis points.
"In recent weeks, rates have dropped by half a percent, but potential homebuyers continue to hold out for lower rates and more inventory," said Sam Khater, Freddie Mac chief economist, in a press release. "This dynamic is reflected in the latest data showing that existing-home sales have fallen to a thirteen-year low."
But even if the 30-year FRM goes to 6.4% as some have predicted, that will not be enough to get potential sellers to list their properties in the near term, said Mark Fleming, chief economist at First American Financial. Approximately 90% of borrowers have rates below 6%, which is deterring them from acting.
"These existing homeowners will still withhold inventory from the market, which will keep upward pressure on house prices and limit affordability," said Fleming in a press release. "You can't have more existing-home sales without more existing-home inventory. Even though mortgage rates may decline, it's unlikely that it will be sufficient to end the sellers' strike in 2024."
Other rate trackers similarly were down from a week ago.
Zillow's rate tracker as of mid-morning on Wednesday was at 6.92%, down 14 basis points from last week's average of 7.06%.
The conforming 30-year fixed rate, as measured by the Optimal Blue product and pricing engine was approximately 13 basis points lower. On Tuesday, the most recent data available, found it averaged 7.283% versus last Wednesday's 7.409%.
