Lowering mortgage rates boosts home buying

Mortgages are finally getting cheaper: In a welcome development for would-be buyers, last year's spike in mortgage interest rates has largely settled.

The average rate offered for a 30-year fixed mortgage fell again this week, home loan giant Freddie Mac said Thursday. Rates are now almost a full percentage point below their recent peak of 7.08% in November. The chart below shows how mortgage rates have fallen.

Just as inflation (and the Federal Reserve's response to it) was responsible for 2022, recent cycles have driven rates lower. Borrowers put off loans offered at lower interest rates: Mortgage applications for both purchases and refinances rose 28% last week, the Mortgage Bankers Association said.

Mortgage rates hit record highs during the pandemic, but surged last year on fears of inflation – making buying a home more expensive than ever.

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