(Photo Illustration by Steven Dilakian for The Real Deal with Getty)
For months, mortgage rates rose with no end in sight, and potential homebuyers backed off. Now the reverse is happening.
The average rate for 30-year fixed-rate mortgages fell for the second week in a row to 6.67 percent, according to the Mortgage Bankers Association. It is now down almost 50 basis points from a peak of 7.16 percent one month ago.
“The decrease in mortgage rates should improve the purchasing power of prospective homebuyers, who have been largely sidelined as mortgage rates have more than doubled in the past year,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.
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The turnaround may be fledgling and fragile, but is nonetheless welcome in an industry that has suffered losses and layoffs this year.
Some signs of trouble in the nation’s housing market did emerge last month. The delinquency rate rose 12 basis points from September to 2.91 percent, driven by a 9.4 percent rise in 30-day delinquencies, according to Black Knight.
The firm noted that Florida led the jump in new early delinquencies, with the state’s delinquency rate rising 53 basis points to 3.42 percent. The rate’s 18 percent increase is likely attributable in part to Hurricane Ian.
That is because lenders are going easier on troubled borrowers than they did before the pandemic. They began the process on just 4 percent of seriously delinquent mortgages in October, less than half the rate of the years leading up to the pandemic.
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