(Bloomberg) -- Mortgage rates in the US dropped for the fifth straight week.
The average for a 30-year, fixed loan was 7.22%, down from 7.29% last week, Freddie Mac said in a statement Thursday.
Buyers trying to break into the market are getting some relief as rates pull back slightly from the highest levels in two decades. But the market is still challenging. High borrowing costs have discouraged current homeowners from selling their homes and getting loans at the higher rates, keeping the pool of homes for sale small.
A measure of pending home sales fell in October to the lowest since the index started in 2001, according to the National Association of Realtors.
“Market sentiment has significantly shifted over the last month, leading to a continued decline in mortgage rates,” Sam Khater, Freddie Mac’s chief economist, said in the statement. “The current trajectory of rates is an encouraging development for potential homebuyers.”
Mortgage rates are easing amid signs that the Federal Reserve may leave its benchmark interest rate unchanged when it meets in December. Some policymakers supported continuing to hold rates steady this week, while one argued further hikes may be needed to curb inflation to its target. The Fed’s “Beige Book” survey showed US consumers have tightened spending on discretionary items such as appliances and furniture.
“Despite the mixed messages from the Fed, many investors are inclined to believe that the Federal Reserve has concluded its interest rate hike cycle,” said Jiayi Xu, a Realtor.com economist.
©2023 Bloomberg L.P.