Mortgage Rate Increase Breaks Trend

The big news in the real estate market this week has been the slight uptick in the average rate of a 30-year fixed rate mortgage. 

According to Freddie Mac, the mortgage rates had been steadily declining for five weeks prior to the week ending December 29, 2022. This led to a drop of three-fourths of one percent, which may seem quite minimal, but according to the Mortgage Bankers Association, even a modest decline to 6.31% led to a 6% uptick in demand for mortgage refinancing. 

As of December 29, the average mortgage rate has increased slightly, ticking back up to 6.42%, an increase of 0.15%. 

This reversal of the trend of decrease comes on the announcement by the Federal Reserve that it will be raising the federal fund rate for 2023, in its continuing effort to curb inflation.

Fluctuations in the market are to be expected, as investors wait to see the impact of these policies. 

“While the intensity of weakness is moderating, the market continues to decline and forward leading indicators suggest housing will remain weak throughout the winter,” Freddie Mac Chief Economist Sam Khater said. 

This national slowdown is reflected in Huntsville’s real estate market. As of the week ending December 15, pending sales for single-family units decreased 33.3%, and new listings decreased by 20.1%. 

In short, the market is slow, it’ll continue to be slow for a while, so pop some New Year’s Eve champagne, hold onto your cash, and basically hibernate until 2023 policies come into play to reset the board and thaw out the market a bit. 

From all of us here at the Huntsville Business Journal, we wish all of our readers a happy and prosperous new year. We’ll continue to keep our readers informed of market conditions, for 2023 and beyond.