Average U.S. mortgage rate dips to 6.58%
A home in Mount Lebanon, Pa., under contract last month. Credit: AP/Gene J. Puskar
The average rate for a 30-year fixed mortgage moved down slightly this week to its lowest point since the middle of September, according to new data from mortgage giant Freddie Mac.
The average was 6.58% for the week ending Wednesday, which was down from 6.61% the previous week. Just two weeks ago, the average stood at 7.08% before rates dropped the most in a single week since 1981.
The ups and downs have made it difficult for homebuyers to estimate how much they can expect to pay for their monthly mortgage payment. The interest costs associated with a mortgage have become much more expensive as the average rate has climbed from 3.1% at this time a year ago.
"This volatility is making it difficult for potential homebuyers to know when to get into the market, and that is reflected in the latest data which shows existing home sales slowing across all price points," Sam Khater, Freddie Mac's chief economist said in a statement.
Last week, the National Association of Realtors said sales of existing homes in the United States fell for the ninth month in a row in October and there were 28.4% fewer sales than in the previous October. Long Island has experienced a similar drop-off. The number of homes sold across Long Island fell by 26.4% last month compared with the same month a year ago.
While it is more expensive to finance a home purchase, local real estate agents have told Newsday that the buyers who remain in the market are seeing less competition for homes than they had earlier this year. Yu Gao, a real estate agent at Daniel Gale Sotheby's International Realty in Stony Brook, said she has noticed attendance at open houses falling this year as interest rates surged.
"If the buyer can afford this relatively higher interest rate, then it's a good time for them to pick and choose. They have that power to negotiate a little bit, and they don't have to compete with other buyers as much," she said. "But it depends on the condition of the house. If the house is picture-perfect, you will still have multiple offers."
Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.
