US mortgage rates plummeted to 7%, the lowest mark since June

Posted on December 26, 2023   |  

The interest rate for the most common U.S. home mortgage dropped to 6.83%, hitting its lowest level since June.

In the week ending December 15, the average contract rate for a 30-year fixed-rate mortgage went down by a notable 24 basis points.

This is a significant change, considering that the interest rate hasn't been below 7% since July 28. 

In late October, it had even reached almost 8%, which was the highest in 2 decades.

The decrease in mortgage rates is linked to signals from the Federal Reserve, suggesting a shift from increasing to decreasing borrowing costs in the upcoming year.

Despite the lower mortgage rates, there wasn't an immediate increase in home buying or refinancing activities. 

Refinance and purchase applications slightly declined, except for a notable 18% rise in VA refinance applications.