(Oct 23): Mortgage rates fell for the first time in nine weeks, providing little comfort to sellers facing the slowest US housing market in at least 25 years.
 
The average for a 30-year, fixed loan declined to 7.32% from 7.4%, Freddie Mac said in a statement on Thursday. The rate remains close to the highest level since November 2023. A year ago, it was 6.19%.

Borrowing costs that have surged over the past two months have strained housing affordability, a key issue for voters with the midterm elections less than two weeks away. More sellers are being forced to cut prices, offering some relief to the buyers who remain.

“Buyers may be gaining power at the negotiating table as the pace of sales slows, but that leverage has come at the expense of affordability,” Realtor.com senior economist Jake Krimmel said before the Freddie Mac report was released.

Pending sales of existing US homes fell to a record low in September as mortgage rates above 7% weighed on demand, according to a National Association of Realtors index dating to 2001.

Even with this week’s drop, mortgage rates are up 1.17 percentage points since the start of the year, the largest yearly advance since 2022. At current levels, someone would spend almost US$355 (RM1,448) more a month in principal and interest on a US$500,000 property and about US$710 more on a US$1 million property than if they had locked in a mortgage when rates fell below 6% in early February. The calculation assumes a 20% down payment.

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