Mortgage rates in U.S. fall for sixth week, dropping closer to 7%

Mortgage rates in the U.S. fell for a sixth straight week, slipping to the lowest level since August.

The average for a 30-year, fixed loan was 7.03%, down from 7.22% last week, Freddie Mac said in a statement Thursday.

Mortgage rates have retreated in recent weeks, bringing slight relief to homebuyers who have been facing the highest borrowing costs in years.

The housing market still remains tough, with a limited supply of homes for sale helping to prop up prices and squeeze affordability even more.

When rates began to drop, applications for purchase loans rebounded initially, “but this improvement in demand diminished in the last week,” Sam Khater, Freddie Mac’s chief economist, said in the statement.

“Although these lower rates remain a welcome relief, it is clear they will have to further drop to more consistently reinvigorate demand.”

Signs point to another pause in the Federal Reserve’s rate-hiking campaign when it meets next week.

Job openings pulled back in October to the lowest level since early 2021, according to a Labor Department survey.

The government’s monthly employment report, a key data point for the central bank, is due Friday.

“We predict that sustained improvement in inflation will bring the mortgage rate down to 6.5% by the end of 2024,” said Jiayi Xu, a Realtor.com economist.