Mortgage rates fall below 7% for the first time since August

That was down 8 basis points from the previous week — one basis point is equal to one-hundredth of a percentage point. 

A year ago, the 30-year fixed-rate mortgage was averaging at 6.31%.

The average rate on the 15-year mortgage was 6.38% as of Dec. 14, up from 6.29% last week. The 15-year was at 5.54% a year ago.

Freddie Mac’s weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage. 

Separate data collected by Mortgage News Daily said that the 30-year fixed-rate mortgage was averaging at 6.62% as of Thursday afternoon.

What Freddie Mac said: “Given inflation continues to decelerate and the Federal Reserve Board’s current expectations that they will lower the federal funds target rate next year, we likely will see a gradual thawing of the housing market in the new year,” Sam Khater, chief economist at Freddie Mac, said in a statement. 

What are they saying? “We often talk about how lower mortgage rates will bring more buyers into the market. But in this very unusual market, where inventory has been locked down, it is more important to watch how falling rates influence prospective sellers’ decisions,” Lisa Sturtevant, chief economist at Bright MLS, said in a statement. 

“A homeowner with a sub-three percent mortgage is very reluctant to sell if it means they have to take out a loan with a rate that is more than double,” she added. 

But “we are going to see that life changes — whether family or financial —are going to push more homeowners to make a move, even if it means giving up their low rate,” Sturtevant said.

The 10-year Treasury note
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was at 3.9% as of midday Thursday.