Housing News

Mortgage Rates Fall for Fourth Straight Week as Homebuyers Get More Relief

Mortgage interest rates fell for the fourth consecutive week. They reached their lowest level in seven weeks, offering homebuyers some relief from elevated borrowing costs.

The average rate on a 30-year fixed mortgage dropped to 7.11% for the week ending Nov. 12, down from 7.18% the previous week, according to Freddie Mac. A year ago, the average rate was 6.24%.

Sam Khater, Freddie Mac’s chief economist, called the dip “a welcome development that gives borrowers greater flexibility as they navigate the current housing market,” in a statement.

For a homebuyer purchasing a $400,000 home with a 20% down payment, the monthly principal and interest payment on a 30-year fixed mortgage at 7.11% would be about $2,153. That’s compared with $2,168 at last week’s 7.18% rate. That’s a savings of roughly $15 a month, excluding taxes and insurance.

Total mortgage applications increased 6.2% for the week ending Nov. 6, according to the Mortgage Bankers Association (MBA). Applications to purchase homes jumped 8% from the previous week, while refinance applications rose 5%.

“The declining trend in rates helped to spur stronger application activity,” said Joel Kan, MBA’s vice president and deputy chief economist, in a statement.

Despite the weekly gains, purchase applications remained 18% below the same period a year earlier, according to MBA. Refinance applications were down 57%.

The increase in purchase applications included particularly strong gains in Federal Housing Administration (FHA) loans and Department of Veterans Affairs (VA) loans, according to the MBA. The average FHA mortgage rate fell to 6.98% for the week ending Nov. 6, offering lower borrowing costs for eligible homebuyers.

Adjustable-rate mortgages (ARMs) remain another option for homebuyers looking to reduce their initial borrowing costs. ARMs typically offer lower initial rates than fixed-rate mortgages, although their rates and monthly payments may change after the introductory fixed-rate period.

ARMs accounted for 10.9% of total mortgage applications, down from 11.4% the previous week.