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Massachusetts Home Buyer Guide


Mortgage Interest Rates Drop Nearly .75% in a Month

Nov 22, 2023 1:37:11 PM

Since reaching more than 8 percent last month, the average 30-year, fixed-rate mortgage loan has plummeted almost three-quarters of a percent over four weeks, according to the Mortgage News Daily (MND) Index.

First-time home buyers hugging at their new home. The 30-year note reached 8.03 percent on the MND Index, which tracks day-to-day movements in mortgage rates, on October 19, 2023. At the close of business on November 21, 2023, the 30-year, fixed-rate mortgage averaged 7.33 percent, five basis points lower than the day before.

The 30-year mortgage stood at 5.99 percent on February 2, 2023, the lowest point over the past 52 weeks on the MND Index. 

Retreating inflation has helped lower interest rates. "For the third straight week, mortgage rates trended down, as new data indicates that inflationary pressures are receding," said Sam Khater, Freddie Mac's chief economist, on November 16, 2023. "The combination of continued economic strength, lower inflation, and lower mortgage rates should likely bring more potential homebuyers into the market."

Lower rates have resulted in slightly higher mortgage applications to purchase homes. "Both purchase and refinance applications increased to the highest weekly pace in five weeks but remain[ed] at very low levels," Joel Kan, vice president and deputy chief economist for the Mortgage Bankers Association, said on November 15, 2023. "Despite the recent downward trend, mortgage rates at current levels are still challenging for many prospective homebuyers and current homeowners."

Fewer home buyers search for and buy homes during the holiday season and early winter; however, now might be a calmer time to search for a home. The spring market may be more competitive, with rates expected to decline further. If rates drop more from here, home buyers who buy now can refinance later.

Home buyers, especially first-time home buyers, must do their due diligence regarding home loan programs. While the average rates nationally are above 7 percent, local borrowers with 20 percent down payments and excellent credit scores are locking in rates less than 7 percent.

Your interest rate is essential, but so is the overall cost of borrowing. Some financing options include hefty fees, such as FHA's upfront mortgage insurance.

Speaking with a loan officer who has access to various loan products and is willing to patiently go over the pros and cons of each loan program, including first-time home buyer programs, will result in the best financing terms for your situation.

Get Advice About First-time Home Buyer Loan Programs

Topics: Mortgages 101, Mortgage Rates & News


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