Mortgage rates dropped faster this week than at any time in 40 years

Dated: November 21 2022

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MARKETS & ECONOMY

The fall from 7.08% to 6.6% would save buyers approximately $100 a month on a median priced home, according to a report released Thursday from Redfin

BY TAYLOR ANDERSON 11/21/2022

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Mortgage rates dropped at the fastest clip in 40 years this week, falling from 7.08 percent to 6.61 percent on recent positive news about inflation, according to a weekly lender survey released Thursday by mortgage giant Freddie Mac.

The drop means homebuyers would save more than $100 a month compared to a week earlier, according to a Redfin analysis.

While the rate remains more than double what they were to start the year, it provided a glimmer of hope for prospective buyers and sellers who have watched as rates skyrocketed for most of the year.

“The historic drop in mortgage rates is a tick in the ‘good news’ box for the housing market, as lower rates deliver an immediate win for prospective buyers’ pocketbooks,” said Redfin Deputy Chief Economist Taylor Marr. 

Redfin estimates the dip in rates gave buyers $12,000 more purchasing power, and a weekly survey by the Mortgage Bankers Association showed a 4 percent week-over-week jump in mortgage-purchase applications last week.

“Serious buyers who need to purchase a home as soon as possible can feel good about pouncing on a home this week, knowing it could cost them upwards of $100 less per month than the same home would’ve cost if they’d signed the deal a week earlier,” Marr said. “More casual buyers may want to wait a few more months, as there’s reason to be cautiously optimistic that the worst of inflation and high rates are behind us and monthly payments could come down more.”

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