Mortgage Rates Dip Below 7% After Recent Highs

A modest decline in mortgage rates offers slight relief to homebuyers, though affordability challenges persist due to elevated housing prices.

• The average rate for a 30-year fixed mortgage fell to 6.96%, marking a 13 basis point drop from the previous week.
• Other mortgage types, including 15-year fixed and jumbo 30-year loans, also saw rate reductions, with 15-year loans declining by 16 basis points to 6.06%.
• Despite the recent declines, rates remain significantly higher than the sub-6% levels seen in September 2024, contributing to ongoing affordability challenges for buyers.
• Economists predict that mortgage rates are unlikely to fall below 6% until 2026, citing persistent inflationary pressures and elevated Treasury yields.
• Elevated home prices and a historically high mortgage premium continue to exacerbate affordability issues for prospective buyers, limiting market activity.

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