Thanksgiving brings modest relief for prospective homebuyers
Mortgage rates eased ahead of the Thanksgiving holiday, offering potential relief to homebuyers as the housing market enters its traditionally slowest season.
The 30-year fixed-rate mortgage averaged 6.23% as of Nov. 26, down from 6.26% the previous week, according to Freddie Mac’s Primary Mortgage Market Survey. The rate also reflected a notable decline from 6.81% one year earlier.
“Heading into the Thanksgiving holiday, mortgage rates decreased,” said Sam Khater, Freddie Mac’s chief economist. “With pending home sales at the highest level since last November, homebuyer activity continues to show resilience as we near the end of the year.”
The 15-year fixed-rate mortgage averaged 5.51%, down from 5.54% the week before. A year ago, the 15-year rate stood at 6.10%.
The rate decline reflected a pullback in long-term US Treasury bond yields. According to ABC News, the 10-year Treasury yield stood at 4.01% at midday Nov. 27, down from approximately 4.13% one week earlier. Mortgage rates generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide for pricing home loans.
Just four weeks earlier, the average rate was 6.17%, its lowest level in more than a year.
The decline in rates coincided with increased mortgage application activity. The seasonally adjusted purchase index for the week ending Nov. 21 rose 8% from the previous week, according to the Mortgage Bankers Association. Government loan applications, including FHA, VA and USDA loans, increased 9% and “had the strongest week since 2023,” according to Joel Kan, MBA’s vice president and deputy chief economist.
Despite these positive indicators, experts cautioned against expecting substantial further rate drops. “It is looking increasingly likely that the Fed will cut interest rates when it meets on Dec. 10. However, we should not expect that to translate into a big drop in mortgage rates,” said Lisa Sturtevant, chief economist at Bright MLS.
Wall Street traders are betting on a nearly 83% probability that the Fed will cut rates next month, according to data from CME Group.
Home prices showed signs of becoming more favorable for buyers. The asking price per square foot dropped 1.5% compared with one year earlier, reaching $210.60 as of Nov. 24, according to Mike Simonsen, chief economist at Compass.
However, buyer demand appeared to slow as the holiday season approached. Signed contracts declined 2.1% year-over-year during the four weeks ending Nov. 23, the largest annual decline in eight months, according to Redfin data.
