US mortgage rates fall from November peak following Fed rate hike
The 15-year fixed mortgage rate posted a three-basis-point decrease from last week, down to a 5.14% average. A year ago, at this time, the 15-year rate was 2.77%.
“A hike in short-term rates, though important, is only indirectly impactful for mortgage rates,” explained Shampa Bhattacharya, director at Fitch Ratings. “Mortgages are mostly priced off of long-term rates, so the shape of the yield curve also matters.
“30-year mortgage rates peaked in November 2022 at over 7% and since then have trended down to 6.13%, following the moves in the longer end of the yield curve from over 4% in October and November to 3.5% currently.”
Bhattacharya added that the latest lower rate hike suggests a slowdown in the Fed’s momentum, which could be an incremental positive for mortgage markets as the long-term rates will continue to drop.
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