US mortgage rates fall to lowest since October, hitting 6.69%

MORTGAGE rates in the US fell for a second straight week.

The average for a 30-year fixed loan was 6.69 per cent, the lowest since Oct 24 and down from 6.81 per cent last week, Freddie Mac said on Thursday (Dec 5).

Borrowing costs are still considerably higher than they were in September, and meaningful relief may be some way off. Redfin expects 30-year mortgage rates to stick fairly close to 7 per cent throughout 2025.

Traders speculate that the US Federal Reserve will reduce its policy rate just twice next year if the economy stays strong and president-elect Donald Trump enacts proposed tax cuts and tariffs, the brokerage said.

Still, even with a modest drop in rates, “purchase demand has notably improved”, Sam Khater, Freddie Mac’s chief economist, said. “The responsiveness of prospective homebuyers to even small changes in rates illustrates that affordability headwinds persist.”

House hunters have long been sidelined by high prices and a shortage of desirable listings. Now, the supply of homes for sale is “finally approaching pre-pandemic levels”, said Realtor.com senior economist Joel Berner. “But with listing prices and mortgage rates remaining stubbornly high, buyers are seeing plenty of options but few that they can afford.”