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Aspiring home buyers saw signs of hope for greater affordability this week as the average 30-year mortgage rate dropped to 6.49%, Freddie Mac reports. Recent economic data suggests mortgage rates have peaked after surpassing 7% in the second week of November. “Rates are still more than double those of a year ago,” cautions Nadia Evangelou, senior economist and director of forecasting for the National Association of REALTORS®. “But if inflation continues to slow down, rates may stabilize near 6%.”
More stable rates could bring some uneasy home buyers back to the market, which would spell relief after recent dips in home sales and contract signings. Moderating rates also reflect growing optimism “around the prospect that the Federal Reserve will slow its pace of rate hikes,” says Sam Khater, Freddie Mac’s chief economist. However, “even as rates decrease and house prices soften, economic uncertainty continues to limit homebuyer demand as we enter the last month of the year.”
Freddie Mac reports the following national averages with mortgage rates for the week ending Dec. 1:
30-year fixed-rate mortgages: averaged 6.49%, dropping from last week’s 6.58% average. Last year at this time, 30-year rates averaged 3.11%.
15-year fixed-rate mortgages: averaged 5.76%, also falling from last week’s 5.90% average. A year ago, 15-year rates averaged 2.39%.
*Freddie Mac has stopped reporting on average weekly rates for five-year hybrid adjustable-rate mortgages.
Conforming Loan Limits Rise for 2023
The Federal Housing Finance Administration released its new conforming loan limits for 2023, hiking them 12% from this year’s base amount—which reflects the rise in home prices in 2022. Mortgage giants Fannie Mae and Freddie Mac will back loans at the baseline amount of $726,200 in 2023 (up from $647,200 this year). In high-cost areas of the country, the new loan limit for 2023 will be $1,089,300.
“This increase will allow buyers and homeowners in most areas across the country to get a conforming loan when they purchase a home,” Evangelou notes. By staying within that amount, borrowers often have an easier time getting a loan approved and qualifying for more competitive interest rates.