Mortgage rates fall for third straight week, bringing some homeseekers off the sidelines

By Anna Bahney, CNN

Washington, DC (CNN) — Mortgage rates fell for the third straight week and applications to purchase a home increased by the most in five weeks, in a promising sign for a housing market that has stalled out as mortgage rates edged towards 8%.

The 30-year fixed-rate mortgage fell to an average of 7.44% in the week ending November 16, down from 7.5% the week before, according to data from Freddie Mac released Thursday.

A separate report showed that applications to purchase or refinance a home were up by 2.8% last week, the highest in five weeks, according to data from the Mortgage Bankers Association. Applications for a mortgage remain at historically low levels, however.

Mortgage rates have cooled in recent weeks as markets absorbed the latest economic indicators, including an improving inflation picture.

“For the third straight week, mortgage rates trended down, as new data indicates that inflationary pressures are receding,” said Sam Khater, Freddie Mac’s chief economist. “The combination of continued economic strength, lower inflation and lower mortgage rates should likely bring more potential homebuyers into the market.”

The average mortgage rate is based on applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit. A current buyer’s rate may be different.

While the Federal Reserve does not set the interest rates that borrowers pay on mortgages directly, its actions influence them.

Mortgage rates tend to track the yield on 10-year US Treasuries, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually ends up doing and investors’ reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.

This story is developing and will be updated.

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