The 30-year fixed rate dipped again last week, though the 15-year inched up, breaking a downward streak, Freddie Mac reported Thursday.
Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 6.27%, down from 6.31% the week prior.
A year ago at this time, the 30-year FRM averaged 3.05 percent.
The 15-year fixed-rate mortgage rose from 5.54% to 5.69%. A year ago, it averaged 2.30%.
Most Americans opt for a 30-year FRM. In 2018, lenders wrote 22 times more 30-year notes than 15-year notes, according to a NerdWallet analysis.
Last week’s rate increase will likely affect only a small portion of potential buyers who make enough money to afford larger monthly payments.
“Heading into the holidays, mortgage rates continued to move down. Rates have declined significantly over the past six weeks, which is helpful for potential homebuyers, but new data indicates homeowners are hesitant to list their homes,” said Sam Khater, Freddie Mac’s Chief Economist.
“Many of those homeowners are carefully weighing their options as more than two-thirds of current homeowners have a fixed mortgage rate of below four percent.”
Slipping rates have saved the typical homebuyer nearly $300 in monthly payments since they hit a peak in late October at 7%.
Some buyers are beginning to return to the market as rates and home price appreciation moderate.
“Today’s market isn’t nearly as hot as it was earlier this year, and I don’t expect it to return to those levels,” said Seattle Redfin agent Shoshana Godwin. “But it’s getting warm.”
But affordability remains a challenge, and winter is already a slow season for homebuying. Sales aren’t expected to pick up until at least mid-January despite the early signs of increased demand.
Matthew Speakman, Zillow Home Loans senior economist, said January is when he expects to see a substantial change in rates.
“Looking ahead, while it’s not uncommon for there to be some mild volatility at the end of the year, it’s likely that a more substantive move in mortgage rates won’t occur until early January, when the next read on a key inflation gauge is due,” Speakman said.
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