Dec 14, 2023 - Economy

Mortgages dip below 7% after the Fed hints at rate cuts

Data: Freddie Mac; Chart: Axios Visuals
Data: Freddie Mac; Chart: Axios Visuals

Mortgage rates dropped below 7% this week, marking a rapid descent since peaking near 8% roughly two months ago, per Freddie Mac's weekly data.

Why it matters: Lower borrowing costs will make homes a tad more affordable for buyers — though mortgages are still quite expensive by historical standards.

The backstory: Mortgage rates have surged since the Federal Reserve began raising its policy rate in early 2022, as part of its battle against inflation.

  • But Fed chair Jerome Powell said Wednesday that the central bank could begin cutting rates next year.
  • Expectations for Fed cuts have driven rates like mortgages down over the last several months — and this week's confirmation from Fed officials pushed them down further.

What to watch: Whether the recent leg down in borrowing costs leads to a jolt in home sales.

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