House with arrow going slightly down with percentage sign
Illustration by Lanette Behiry/Real Estate News

Mortgage rates inch down for fifth straight week 

Despite the Fed's half-point rate increase on Wednesday, the mortgage market continues to see declining rates, dropping to 6.31% today.

December 15, 2022
3 minutes

Key points:

  • Freddie Mac pegged the 30-year rate average mortgage rate at 6.31% this week, down slightly from 6.33% the week before.
  • After reaching a high of more than 7% in early November, mortgage rates have since fallen by over three-quarters of a percent.
  • The dip happened even as the Federal Reserve raised the benchmark borrowing rate half a point, bringing it to the highest level in 15 years.

Mortgage interest rates ticked down again this week, suggesting that the lending market sees progress in the Federal Reserve's strategy to knock down inflation.

The 30-year fixed-rate mortgage averaged 6.31% this week, according to the latest Freddie Mac survey, down from 6.33% a week ago.

"Mortgage rates continued their downward trajectory this week, as softer inflation data and a modest shift in the Federal Reserve's monetary policy reverberated through the economy," said Sam Khater, Freddie Mac's chief economist. "The good news for the housing market is that recent declines in rates have led to a stabilization in purchase demand. The bad news is that demand remains very weak in the face of affordability hurdles that are still quite high."

Mortgage rates declined even though the Federal Reserve, as was expected, raised the benchmark borrowing rate half a point this week. It was a less aggressive rate hike compared to recent months.

"At first, the news took some wind out of the market's sails. But assurances from Fed Chair Powell that the central bank would likely shift their outlook should more evidence emerge that inflation pressures are waning buoyed investors' spirits, sending bond yields — and the mortgage rates they tend to influence — back downward," said Matthew Speakman, Zillow Home Loans senior economist. "Altogether, mortgage rates remain at their lowest levels since the late summer as the year nears its end."

The decline in mortgage rates is good news for borrowers, and the number of loan applications began ticking up last week, said George Ratiu, senior economist at

"With more homes available for sale, and more sporting price cuts, some buyers are running the math and finding that the slide in rates is offering better options within their budgets," Ratiu said.

Even though prospective buyers are seeing some short-term relief, they still face significantly higher costs compared to a year ago. On the plus side, mortgage payments on a typical home have decreased by about $200 since rates peaked five weeks ago, said NAR senior economist & director of real estate research Nadia Evangelou.

But she added, "Although mortgage rates are more than double those of a year ago, home prices continue to be higher than the previous year due to limited inventory. Looking at the housing supply by income level, buyers earning $75,000 face the most significant housing shortage ... these middle-income buyers can afford to buy only 20% of all available listings. As a result, even though there are fewer middle-income buyers in the market, there are still not enough homes for them to purchase."

At this time last year, the 30-year fixed-rate mortgage averaged 3.12%.

The 15-year fixed-rate mortgage settled in at 5.54% this week, which was down from the 5.67% average a week ago. A year ago at this time, the rate averaged 2.34%.

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