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Mortgage rates fall for the fourth week in a row

<i>Rich Pedroncelli/AP</i><br/>Mortgage rates fall for the fourth week in a row. Pictured is a housing development in Folsom
Rich Pedroncelli/AP
Mortgage rates fall for the fourth week in a row. Pictured is a housing development in Folsom

By Anna Bahney, CNN

Mortgage rates dipped again this week, dropping for the fourth week in a row.

The 30-year fixed-rate mortgage averaged 6.33% in the week ending December 8, down from 6.49% the week before, according to Freddie Mac. A year ago, the 30-year fixed rate was 3.10%.

Mortgage rates have risen throughout most of 2022, spurred by the Federal Reserve’s unprecedented campaign of hiking interest rates in order to tame soaring inflation. But mortgage rates have tumbled in the last couple of weeks, following reports that indicated inflation may have finally reached its peak.

The rate drops come amid concerns over lackluster economic growth, said Sam Khater, Freddie Mac’s chief economist.

“Over the last four weeks, mortgage rates have declined three quarters of a point, the largest decline since 2008,” said Khater. “While the decline in rates has been large, homebuyer sentiment remains low with no major positive reaction in purchase demand to these lower rates.”

The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit. But many buyers who put down less money upfront or have less-than-perfect credit will pay more than the average rate.

Eyes on next week’s economic events

Rates declined again this week as investors watched for more signs of slowing inflation, said Danielle Hale,’s chief economist.

“Next week’s Consumer Price Index data will confirm whether these trends are pervasive across the variety of goods and services consumers buy,” she said.

Markets are also waiting to hear from the Fed, which is expected to announce another rate hike at its meeting next week. Analysts anticipate the rate increase could be a smaller half-point jump, rather than the three-quarter-point hikes that the central bank has rolled out four times in a row this year.

Mortgage rates tend to track the yield on 10-year US Treasury bonds. When that rate goes up, the 30-year fixed-rate mortgage typically goes up, too. When the treasury rate goes down, so do mortgage rates.

The Fed has signaled it intends to continue raising rates — even if it’s by smaller increments — until inflation shows clear signs of falling.

“This means that mortgage rates may continue on the volatile path seen so far in 2022,” said Hale.

As a result of higher costs to finance a home and the volatility of rates, many would-be home buyers have left the market.

Mortgage applications slowed last week, even as the rate for a 30-year fixed mortgage decreased again, said Bob Broeksmit, president and CEO of the Mortgage Bankers Association. The average loan size for a purchase application last week was at its lowest level in nearly two years, another indication that home prices are cooling.

“Despite the ongoing decline in mortgage rates that started in October, prospective homebuyers continue to delay decisions to purchase homes, even as home prices flatten or fall,” Broeksmit said.

More volatility ahead

Rates have seen outsized movement this year, mostly headed up, and the weekly swings in mortgage rates have been larger than historical averages, underscoring the overall volatility.

“This has made setting a home purchase budget incredibly difficult for home shoppers who have watched their purchasing power swing up and down as rates fluctuate,” Hale said.

The recent drop below the 7% rates we saw a month ago have brought down the average monthly cost of purchasing a home by nearly $170, Hale said. But today’s buyer of a median-price home, making a 10% down payment, is looking at a monthly payment of $2,340 for principal and interest, an increase of about $900 a month from last year, according to

“As housing costs continues to be a major challenge for both buyers and renters alike, affordable midsize housing markets offer a potential refuge that workers with flexible arrangements may continue to seek out,” Hale said. Homebuyers sought affordability in cities like Hartford, Connecticut; El Paso, Texas; or Louisville, Kentucky, according to

“We expect the top housing markets of 2023 to remain relatively active, even as the number of home sales nationwide is expected to decline,” she said.

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