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Mortgage Rates See Largest Decline Since 2008

Mortgage rates decreased for a second consecutive week, marking the biggest drop since December 2008. According to Freddie Mac, the 30-year fixed-rate Mortgage averaged 5.30 percent in the week ending July 7, down from 5.70 percent the previous week.

Even yet, it’s still much higher than it was at this same time last year (2.90 percent). At the beginning of the year, rates spiked rapidly, reaching a peak of 5.81 percent in mid-June. However, since then, economic worries have caused them to decline. Some of the big rate hikes in May and June were somewhat offset by the 40 basis point decline.

According to Sam Khater, chief economist at Freddie Mac, “during the previous two weeks, the 30-year fixed-rate  fell by half a percent as fears about a future recession continue to increase.” But finding a home within one’s means is still difficult. According to Joel Berner, senior economic research analyst for Realtor.com, listing prices have increased by more than 8.5 percent year-over-year for 24 straight months and Mortgage rates are at their highest levels since the late 2000s.

The fact that additional houses are coming on the market, he added, is the one bright spot for prospective homebuyers. The greatest yearly gain in active listings was seen in June according to statistics from Realtor.com. Additionally, higher prices are reducing demand among potential purchasers. The Mortgage Bankers Association reports that the number of Mortgage applications fell by 5.4% from the previous week to the week ending July 1.

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