Mortgage rates fell below 7 percent this week, according to data released by Freddie Mac on Thursday, after weeks of steady increases amid the Federal Reserve’s battle with persistent inflation.
The 30-year fixed mortgage rate dropped to 6.95 percent as of Nov. 3, down from 7.08 percent last week.
“Mortgage rates continue to hover around seven percent, as the dynamics of a once-hot housing market have faded considerably,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
“Unsure buyers navigating an unpredictable landscape keeps demand declining while other potential buyers remain sidelined from an affordability standpoint. Yesterday’s interest rate hike by the Federal Reserve will certainly inject additional lead into the heels of the housing market.”
Meanwhile, 15-year fixed rates fell to an average of 6.29 percent from 6.36 percent a week ago.
The U.S. central bank has consistently raised interest rates since March, which has drastically cooled the once red-hot housing market and sent mortgage rates soaring.
These higher rates have pushed buyers out of the market as they make monthly costs unaffordable.
Rising mortgage rates also led to a record price slowdown and a drop in the number of homes under contract.
The Fed raised interest rates by 0.75 points again on Wednesday, and Chairman Jerome Powell said they could move higher in coming months. This could mean that mortgage rates continue to increase.
But Powell acknowledged the impact the rate hikes are having on the housing market.
“Housing is significantly affected by these higher rates, which are really back where they were before the global financial crisis. They’re not historically high, but they’re much higher than they’ve been,” Powell said during a press conference on Wednesday. “We do understand that that’s really where a very big effect of our policies is.”