Mortgage rates see biggest weekly dip in over 40 years
EVANSVILLE, Ind. (WFIE) - The 30-year fixed-rate mortgage average in the U.S. experienced its biggest weekly dip since 1981, according to Freddie Mac. The average went from 7.08% to 6.61%.
Aaron Cashmer, the vice president of originations for Mortgage Masters, said things are looking up for the real estate market.
“We think it’s going to be a good year for real estate; different from the last couple of years, but still a great opportunity for first-time home-buyers that are getting into the market,” he said. “There’s a lot of opportunity there. So we’re excited about 2023.”
Rates are still more than double what they were last year, but he said the dip could be a good sign for home-buyers.
“So if they could afford a $200,000 house two weeks ago, now they could afford a $225,000 house,” Cashmer explained.
He said it may not be all good news.
“Generally speaking, when recessions happen, mortgage rates fall,” he said.
October’s Consumer Price Index showed that prices rose at a slower rate than it has been this year, which could indicate that inflation is slowing down.
Still, inflation is high, and the federal interest rate is up, all of which, leads to volatility.
Cashmer said keep home-buyers should keep their heads up but be prepared as rates decrease.
“Will that continue, obviously we hope it will, but the flip side is that would possibly mean that we’re in a recession,” he said.
According to the Dallas Federal Reserve, the mortgage rate decrease could see house prices drop as much as 20%, but keep in mind that’s 20% off of an already massively inflated price.
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