Mortgage rates fall into 5% range for first time since September USA News Update

The average 30-year fixed-rate mortgage rate fell to 5.99%, according to Daily Mortgage News.

The housing market hasn’t seen the rate with a handful of fives since a brief hit in 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 inflation “has eased somewhat but remains elevated”, which was a change from the previous language.

This caused bond yields to fall and mortgage rates to roughly track the 10-year Treasury yield.

“The measured steps can continue as long as economic and inflation data are there to support them. That means rates can go down into the 5s, but are unlikely to rush into the 4s anytime soon,” he said. Matthew Graham, COO of Mortgage News. Daily. “I’m not saying it won’t happen – just that it would take a little longer than some of the rate rallies we remember from the past.”

Mortgage rates peaked in October with the 30-year fixed at 7.37% and have since slipped. For potential buyers, this means savings. For a consumer buying a $400,000 home today with a 20% down payment, the monthly payment is $293 less than it would have been in October.

Lower rates already appear to be stimulating buyer interest.

Door-to-door sales pending, which measures contracts signed on existing homes, rose in December for the first time in six months. They gained 2% from November, according to the National Association of Realtors.

Shares of homebuilders across the country have been in freefall since rates began to drop and many are now off to 52-week highs. The US Homebuilding ETFs reached a new one-year high, up more than 3% on the day.

Homebuilder stocks are also reacting positively to earnings beats reported this week by Pulte Group and last week from the nation’s largest homebuilder, DR Horton. Both builders said they saw renewed interest from buyers in December, attributing this to falling mortgage rates.