Interest rates on mortgages, which have been blamed for Florida’s slowing housing marking, fell for the fourth straight week though they remain more than double from where they were a year ago.
According to Freddie Mac’s Primary Mortgage Market Survey released Nov. 8, the average 30-year-fixed rate mortgage was 6.33% last week, down from an average of 6.49% the previous week. The average 15-year fixed rate mortgage was 5.67% down, from 5.76% the week before.
In late October, before the weekly drops began, the average 30-year mortgage rate was 7.06% and the average 16-year rate was at 6.36%.
This is the longest streak of consecutive weekly drops since the housing market collapsed in 2008.
While any easing in mortgage rates is welcome, average interest rates continue to be far higher than they were last year. The 30-year average rate a year ago was 3.10%, and the 15-year was 2.38%, according to the survey.
While on the face of it rate drops might seem as good news, they are a sign that the economy continues to struggle.
In a statement announcing the survey results, Sam Khater, Freddie Mac’s chief economist, says the falling rates are “due to increasing concerns over lackluster economic growth.”
“Over the last four weeks, mortgage rates have declined three quarters of a point, the largest decline since 2008. While the decline in rates has been large, homebuyer sentiment remains low with no major positive reaction in purchase demand to these lower rates.”
Since the Federal Reserve began raising interest rates to fight off rising inflation, Florida’s housing market, as has most of the nation’s, been battered. What was once a market where buyers fought one another to pay far over the asking price, has cooled considerably. Buyers are priced out as higher mortgage rates make it more expensive to buy and sellers stay on the sideline rather than risk seeing the low rates they locked in spike.
According to Florida Realtors, the sale of single-family homes in October dropped 24.6% when compared to last year. Condominium and town house sales fell 26.9%.
And nationally, the National Association of Realtors reports existing home sales nationally fell 28.4% in October when compared with 2021.