‘A welcome development’: As mortgage rates decline for a fifth week, experts say the market has tipped ‘a bit further in favor of buyers’ despite continued ‘affordability hurdles’

Source: Yahoo! — 

Mortgage rates continued to weaken for the fifth week in a row, after the Fed announced its seventh rate hike of the year.

Sam Khater, Freddie Mac’s chief economist, points to “softer inflation data and a modest shift in the Federal Reserve’s monetary policy” for the continued drop.

The latest consumer price index report from the Bureau of Labor Statistics indicated that inflation may be slowing, with prices across the board rising less than expected in November.

And although the federal funds rate has gone up again this week, it was raised by just half a point — compared to previous hikes of 0.75 basis points.

“The good news for the housing market is that recent declines in rates have led to a stabilization in purchase demand,” Khater says.

“The bad news is that demand remains very weak in the face of affordability hurdles that are still quite high.”

30-year fixed-rate mortgages

The average 30-year fixed rate dipped slightly to 6.31%, Freddie Mac reported Thursday.