Common U.S. mortgage rates of interest fell for the week ending November 17, 2022, welcome reduction for Massachusetts homebuyers battling a profound lack of affordability.
The rate of interest for a 30-year, fixed-rate mortgage averaged 6.61 p.c, down 47 foundation factors from 7.08 p.c the prior week, in response to Freddie Mac’s weekly Major Mortgage Market Survey (PMMS). The 30-year notice averaged 3.10 p.c throughout the identical interval final yr.
The distinction in mortgage principal and curiosity on a $500,000 mortgage between present and final yr’s decrease rates of interest is about $1,000 per 30 days. The Massachusetts Affiliation of Realtors reported that its “Affordability Index” for single-family houses declined 33 p.c in October on a year-over-year foundation. Condominium affordability dropped 37 p.c.
“Mortgage charges tumbled this week because of incoming information that means inflation might have peaked,” Sam Khater, Freddie Mac’s Chief Economist, mentioned. “Whereas the decline in mortgage charges is welcome information, there’s nonetheless a protracted highway forward for the housing market. Inflation stays elevated, the Federal Reserve is prone to maintain rates of interest excessive, and customers will proceed to really feel the impression.”
The rate of interest for the 15-year, fixed-rate mortgage – in style with householders refinancing – averaged 5.98 p.c in comparison with 5.98 p.c the week earlier than and a pair of.39 p.c a yr in the past.
Freddie Mac Adjustments Methodology
Freddie Mac lately introduced enhancements to the PMMS to enhance the gathering, high quality, and variety of knowledge used. As a substitute of surveying lenders, the weekly outcomes are primarily based on 1000’s of functions from throughout the nation submitted to Freddie Mac when a borrower applies for a mortgage. Additionally, the PMMS will now not publish charges and factors or adjustable charges. Freddie Mac carried out the brand new PMMS for the info above.
Khater mentioned the brand new methodology “will enhance its accuracy and reliability … [and] will incorporate extra detailed information and monitor real-time mortgage charges extra carefully.”
The PMMS is concentrated on standard, conforming, totally amortizing residence buy loans for debtors who put 20 p.c down and have glorious credit score.