Mortgage Rates Fall Sharply In Largest Weekly Drop In 41 Years

BY Benzinga | AGENCY | 11/17/22 02:51 PM EST

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.

Read Also: Is The Housing Market Crashing? What Home Depot Says Is Happening Across The US

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.

To read about the latest developments in the industry, check out Benzinga's real estate home page.

Photo: Shutterstock

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