January 16, 2023

The long-term mortgage rate falls again this month.

WASHINGTON — After two consecutive weekly increases, the average US mortgage rate fell again this month, but it remains a bump in the road for many potential and future homebuyers.

Mortgage buyer Freddie Mac reported on Thursday the 12th of this month that the average 30-year average rate fell to 6.33% from 6.48% last week (a year ago the average rate was 3.45%).

At its last meeting of 2022, the Federal Reserve raised its rate 0.50 percentage point, its seventh hike last year. That pushed the central bank's key rate to a range of 4.25% to 4.5%, its highest level in 15 years.

The large increase in mortgage rates over the past year hit the housing market hard, with existing home sales falling for 10 straight months to the lowest level in more than a decade.

The sky-high prices and doubling of mortgage rates have made home buying much less affordable for many families.

Rates on 30-year mortgages typically follow movements in the 10-year Treasury yield, which lenders use as a guide in pricing loans. Investor expectations about future inflation, global demand for US Treasuries, and what the Federal Reserve does with interest rates can also influence the cost of home loans.

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