It’s spooky season, and the housing market feels pretty scary right now.
In just two weeks, mortgage rates have increased roughly 0.3%. According to the data we collect from Bankrate, the average rate for a 30-year fixed mortgage is currently 6.58%.
After rates started falling last month, many prospective buyers (and homeowners looking to refinance) were optimistically gearing up to enter the market. The abrupt about-face in mortgage rates, shooting back to the mid-6% range, has folks on the sidelines again.
For the week ending October 11, mortgage applications decreased by 17% from the week prior, according to the Mortgage Bankers Association. That’s the largest weekly drop since the start of pandemic lockdowns.
Now that the central bank has begun its long-awaited rate cuts, the housing market should experience some relief in the coming months.
Mortgage rates are often quick to rise and slow to fall, and they rarely move in a straight line. Experts stress that for mortgage rates to make sustained and significant dips down, we need to see weaker economic data combined with additional Fed cuts. Even then, there will be bumps along the way, just as we’ve witnessed in October.
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