Mortgage Rates Fall Sharply In Largest Weekly Drop In 41 Years

Mortgage rates dropped significantly last week as a result of U.S. Bureau of Labor Statistics statistics that showed inflation had slowed in October, which is a boon for potential home buyers.

According to Freddie Mac, the 30-year fixed rate average dropped by 47 basis points, from 7.08% to 6.62%, the largest weekly drop since 1981. A year ago, the 30-year fixed rate stood at 3.10%.

“Mortgage rates tumbled this week due to incoming data that suggests inflation may have peaked,” said Sam Khater, Freddie Mac’s Chief Economist.

While the 30-year fixed rate has decreased slightly, overall mortgage rates are still much higher than they were last year, making it difficult for buyers to acquire homes.

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Thirty-year mortgage refinance rates remained stable last week at 6.82%, and homeowners seeking a lower interest rate may want to have a look at 15-year rates instead as they are 66 basis points less than 30-year rates — to illustrate, 30-year fixed re-fi is 6.82% and 15-year fixed re-fi is 6.16%.

Mortgage interest rates last week are far lower than the highest yearly average rate Freddie Mac has ever recorded, which was 16.63% in 1981.

A 30-year fixed-rate mortgage had an average interest rate of 3.94% for 2019 a year before the COVID-19 pandemic disrupted global economies. The lowest yearly average rate in 30 years at 2.96% was in 2021

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“While the decline in mortgage rates is welcome news, there is still a long road ahead for the housing market. Inflation remains elevated, the Federal Reserve is likely to keep interest rates high and consumers will continue to feel the impact,” Khater said.

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