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Mortgage Rates Hit Lowest Point Since September

The 30-year mortgage rate declined to 6.33% this week from 6.49% the week prior, Freddie Mac reported. This is the lowest point that mortgage rates have hit since September.

Weaker homebuyer demand has led to a significant drop in mortgage rates, particularly in the midst of rising inflation. While the Federal Reserve has embarked on a series of interest rate hikes, such hikes are expected to slow down in the face of cooling inflation.

“The overall sentiment that I’m experiencing with clients is skittishness,” Scott Sheldon, branch manager at New American Funding said of his company’s customer reactions to the ongoing inflation. “They want to see what the market does and make the right approach. They want to wait until January… see if interest rates start to slowly trickle down [more].”

A survey released by the Mortgage Bankers Association revealed that the demand for mortgages dropped by 1.9% last week, thereby ending three consecutive weeks of rising demand. Actual purchase activity has declined by 3% over the week.

In response to the decline in demand, sellers have been marking down the prices of their listings. Realtor.com reported that 19.6% of home had a price reduction in November; up 9.2% from last year.

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