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Mortgage rates slip for fourth week

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Mortgage rates in the U.S. fell for a fourth straight week.

The average for a 30-year, fixed loan was 6.09%, down from 6.13% last week, Freddie Mac said in a statement today.

Mortgage costs have come down almost a full percentage point from their recent high, giving hope to some would-be homebuyers looking for a way into a deal. The bidding wars that marked the pandemic housing rally have cooled, and prices are expected to moderate further in the coming months. Still, with listings in short supply, affordability hurdles remain.

The decline in rates, after peaking in November at 7.08%, “can allow as many as 3 million more mortgage-ready consumers to qualify and afford a $400,000 loan, which is the median home price,” Sam Khater, Freddie Mac’s chief economist, said in the statement.

The Federal Reserve on Wednesday announced a 25 basis-point hike to its benchmark interest rate, slowing the pace of its drive to tame inflation. While the Fed’s efforts appear to be working, Chair Jerome Powell said the central bank has “more work to do.”

The Fed controls short-term rates, but long-term rates, including 30-year mortgages, “are a function of market expectations for the path of the economy,” said Mike Fratantoni, chief economist of the Mortgage Bankers Association. “Investors are betting that the economic slowdown and the Fed’s eventual victory over inflation will result in lower rates over time.”

The bankers group sees mortgage rates falling modestly in 2023, ending the year around 5%.

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