Mortgage Rates Ease Slightly but Stay Above 7%

Mortgage rates eased a little this week but are still above 7%. According to NerdWallet, the average rate on a 30-year fixed-rate mortgage slid eight basis points (a small unit of measure, equal to one-hundredth of a percentage point) to 7.26% APR in the week ending Oct. 22.

The rates were provided to NerdWallet by Zillow. Mortgage rates have been above 7% for roughly a month. Mortgage rates also spent about a month at that level in spring 2024.

Major forecasters predict that the 30-year rate will stay at this level into next year. For comparison, Freddie Mac's average 30-year mortgage rate was 7.86% thirty years ago.

Home prices have also changed over time. The median price of an existing home was $121,400 in October 1996. In September, the median sale price for an existing home was $417,500.

Home buying activity slowed in September. Pending home sales decreased 7.3% month over month and 11.3% year over year. All four NAR regions saw decreases in pending home sales from last month and last year.

Many homeowners have lower rates on their loans. As of the second quarter of this year, 49.1% of outstanding mortgages have an interest rate of 4% or lower.

Home building also showed signs of slowing. October data showed builder sentiment at its lowest level in 14 years. Building permits and housing starts for September were down month over month and year over year.

A large bipartisan housing bill became law in July.