Housing News

Something to Give Thanks For: Mortgage Rates Tick Down

Homebuyers and homeowners have something to be grateful for just in time for Thanksgiving: Lower mortgage interest rates.

Mortgage rates averaged 6.23% for 30-year, fixed-rate loans in the week ending Nov. 26, according to Freddie Mac data.

That’s down a little from 6.26% last week. And it’s more than half a point lower than this time last year, when rates averaged 6.81%.

Even small drops in rates may help make it more affordable to buy a home. Lower rates may also translate into monthly savings for homeowners who refinance their loans.

“Heading into the Thanksgiving holiday, mortgage rates decreased,” said Freddie Mac Chief Economist Sam Khater in a statement.

The U.S. Federal Reserve could drive mortgage rates down further. It will decide at its December meeting whether to leave its benchmark interest rate as is or cut rates. If the Fed signals a rate cut is likely, mortgage rates could fall.

The two rates are separate, but mortgage rates generally follow the direction of the Fed’s benchmark rates. 

Lower rates have been driving an increase in home sales.

Existing home sales were 1.7% higher year-over-year in October, according to the National Association of Realtors (NAR).

Pending home sales, which represent homes that are under contract but haven’t closed yet, rose 1.9% from September to October, according to NAR. However, pending sales did decrease 0.4% year-over-year.

“With pending home sales at the highest level since last November, homebuyer activity continues to show resilience as we near the end of the year,” Khater said.