Mortgage rates have taken a rare dip this week, according to Freddie Mac's weekly data. The 30-year fixed-rate mortgage (FRM) averaged 6.42%, down from 6.6% recorded last week. The 15-year fixed-rate mortgage also fell to 5.68%, down from 5.90%. These rates are significantly higher than this time a year ago, when the 30-year FRM averaged 4.42% and the 15-year FRM averaged 3.63%.
The decrease in rates is attributed to market concerns over the past two weeks. According to Freddie Mac's Chief Economist Sam Khater, this could lead to an improved home buying demand and stabilizing home prices. This is further reinforced by the Federal Reserve's decision to raise interest rates by 25 basis points, while hinting that it may be done with rate hikes.
As mortgage rates decrease, homeowners could save hundreds or even thousands of dollars per year. This could lead to an increase in home buying activity and could result in a recovery of the real estate market. However, the current rates are still significantly higher than this time a year ago, and the impact of the rate decrease remains to be seen.