Mortgage rates dropped even further this week. According to Freddie Mac, the 30-year fixed mortgage rate decreased to 6.27% from 7.08% six weeks ago. As a result, homeownership has become nearly 10% more affordable in the last six weeks as the monthly mortgage payment decreased to $2,140 for the median-priced home.
With mortgage rates double those of a year ago, home sales activity has declined significantly compared to the previous year. However, this year's activity is only 4% lower than the historical average. About 4.9 million homes are usually sold during January and November of each year. This year, 4.7 million homes were sold.
Unless inflation surprises with an upswing, mortgage rates will move closer to 6% at the beginning of the next year, bringing more buyers back to the market.