Following market trends, mortgage rates fell this week. According to Freddie Mac, the average rate on a 30-year fixed mortgage fell to 6.33% from 6.48% last week. Prices rose nearly 6% as inflation eased in December for the sixth consecutive month. Since their most recent peak in mid-November, mortgage rates have decreased by 0.75 percent.
The beginning of the new year allows people to start over and set their resolutions for the year. One of those resolutions might be buying a house. The downward trend in mortgage rates provides hope for many home buyers in the months ahead. With a rate of 6% instead of 7%, buyers pay about $2,700 less each year on their mortgage. As a result, home ownership is affordable to approximately 1.4 million more renters and 4.3 million more homeowners. This can bring more buyers to the market, increase demand for housing and increase market competition.
However, it’s not just cheap that’s a roadblock. There is also homelessness. Historically, a 6-month supply is required for a typical market with enough available housing for buyers. However, there is a 3-month supply of homes at the current sales pace. Even with 1.1 million homes available for sale, buyers are still having a hard time finding a home to buy.