Potential buyers at open house florida.
Mike Stocker | South Florida Sun Sentinel | Tribune News Service | Getty Images
The average rate on a 30-year fixed-rate mortgage has fallen to 5.99%, according to Daily Mortgage News.
The housing market hasn’t seen a five-handle price since as recently as early September. Before that, it was early August.
The rate started this week at 6.21% and fell sharply on Wednesday after Federal Reserve Chairman Jerome Powell said that inflation has “subsided somewhat but remains elevated,” a shift from previous language.
This drove up bond yields, and mortgage rates loosely track the yield on 10-year Treasury notes.
Mortgage rates peaked in October with the 30-year constant at 7.37% and have been falling ever since. For potential homebuyers it means savings. For a consumer who buys a $400,000 home today with a 20% down payment, the monthly payment is $293 lower than it was in October.
Low interest rates seem to pique buyer interest.
Pending home sales, which measures contracts signed on existing homes, rose in December for the first time in six months. They gained 2% compared to November, according to the National Association of Realtors.
Inventories of the country’s homebuilders have been on a tear since rates began to ease and many saw 52-week highs today. the American Homebuilder ETF It hits a new one-year high, up more than 3% on the day.
Homebuilder stocks are also reacting positively to the earnings beats reported this week from Bulletgroup And last week from the nation’s largest homebuilder, Dr. Horton. Both builders reported seeing renewed buyer interest in December, which they attributed to lower mortgage rates.