Mortgage rates fall to lowest level in over 2 months

Mortgage rates fell for a sixth consecutive week to the lowest level in more than two months, mortgage buyer Freddie Mac said Thursday.

Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage decreased to 6.76% from last week’s reading of 6.85%. The average rate on a 30-year loan was 6.94% a year ago.

“The drop in mortgage rates, combined with modestly improving inventory, is an encouraging sign for consumers in the market to buy a home,” said Sam Khater, Freddie Mac’s chief economist.

MORTGAGE RATES FALL FOR FIFTH WEEK IN A ROW, HOVER NEAR 7%

The average rate on the 15-year fixed mortgage fell to 5.94% from 6.04% last week. One year ago, the rate on the 15-year fixed note averaged 6.26%.

US PENDING HOME SALES FALL TO RECORD LOW IN JANUARY

Mortgage rates ranged from 6.91% to 7.04% in January, and the National Association of Realtors (NAR) said that in comparison to one year ago, the monthly mortgage payment on a $300,000 home increased by an extra $50 to $1,590.

NAR reported on Thursday that its pending home sales index fell to the lowest level on record in January due to the double whammy of high mortgage rates and high home prices. Pending home sales were down 5.2% compared with a year ago.

“It is unclear if the coldest January in 25 years contributed to fewer buyers in the market, and if so, expect greater sales activity in the upcoming months,” said NAR chief economist Lawrence Yun. “However, it’s evident that elevated home prices and higher mortgages strained affordability.”

FOX Business’ Eric Revell contributed to this report.