Three Weeks of Relief, and One Number That Hasn't Moved
Photo by Alex Simpson on Unsplash
The headline is a good one: mortgage rates fell for the third straight week.
Freddie Mac's survey put the 30-year fixed at 7.18% on November 5, down from 7.24% the week before and 7.40% in mid-October. The 15-year averaged 6.57%.
If you have been waiting for a sign, that is a sign. It is also worth reading the rest of the sentence.
The year-over-year picture
A year ago, the 30-year averaged 6.22%. Today's rate is about 0.96 of a percentage point higher. The last three weeks have taken some of the edge off, but they have not returned us to where buyers were twelve months ago.
That is the gap I hear about in nearly every conversation. People remember the rate they could have had, and they measure every offer against it.
What to watch next
Three dates are worth putting on the calendar:
- November 12: the next Freddie Mac survey, which will tell us whether this is a streak or a blip.
- December 8-9: the Federal Reserve meets.
- December 10: the November Consumer Price Index arrives.
I would treat a fourth week of declines as encouraging, not conclusive. One more point of caution: Fannie Mae reportedly expects rates to average around 7.5% through 2027. That figure comes from a secondary source, a Norada blog, so I would not build a plan around it. But it is a reminder that the forecasts are not unanimous about relief.
How I would think about it
If you are buying, the useful question is not where rates will be in December. It is what payment you can live with at today's rate, and whether the house is worth that payment. A rate can be refinanced later. A purchase price cannot.
If you are selling, a gentle downward drift helps. Buyers who were sitting out may take a second look, and the ones already in the market may stretch a little further.
Either way, a three-week decline is welcome news. Just keep it in proportion. It is progress from 7.40%, and still a long way from 6.22%.
If you want to run the numbers on a specific property, call me. It takes about ten minutes, and it is better to know where you stand before the next headline.
