The savings are a result of the recent decline in rates for a 30-year fixed mortgage, which dropped for a third straight week to 6.49%, according to data from the Mortgage Bankers Association (MBA) Wednesday. That’s well below the 7.16% average mortgage rate that was offered the week ending Oct. 21. The difference translates into significant monthly savings for homebuyers. The monthly mortgage payment for a median-priced home—$379,100, according to the National Association of Realtors—would be $1,914.94 this week versus $2,050.42 for the week ending Oct. 21 (assuming a 20% down payment). A lower monthly payment is welcome news for would-be homebuyers, who have faced soaring home prices since the pandemic began, and relentlessly higher mortgage rates since the beginning of the year. Those two factors have combined to make overall mortgage costs balloon to heights that have made homebuying unaffordable for many. Mortgage rates, which had dipped below 3.00% in 2020 and 2021, have almost doubled since the beginning of this year by MBA’s measure. Rates typically move in the same direction as yields on 10-year Treasury bills, and those have risen as investor fears about inflation, and the Federal Reserve’s response to it, have intensified. Recent signs of easing inflation have cooled mortgage rates, but some economists warned the progress could quickly be reversed. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.
