Dec 14, 2023 - Economy
Mortgages dip below 7% after the Fed hints at rate cuts
Add Axios as your preferred source to
see more of our stories on Google.
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.
- High mortgage rates have frozen the housing market, keeping first-time buyers out and locking existing homeowners in place.
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.
