After the 30-year fixed-rate mortgage skyrocketed to 7.37% in October, the U.S. housing market inched closer to a recession. New and existing sales fell at their fastest pace since 2006, inventory fell in popular markets, and home prices began to drop from unsustainable highs reached during the pandemic.
Now, signs of decelerating inflation are causing financial markets to loosen, and after months of consecutive gains, mortgage rates are falling. The average 30-year fixed mortgage rate dropped to 5.99% on Thursday, the first sub 6% mortgage rate since September 12, 2022, Fortune reports.
Let’s be clear: The U.S. housing market remains slumped.
While the economic shock spurred by spiked mortgage rates has weakened, it’s still very much here. And those elevated mortgage rates, combined with the Pandemic Housing Boom’s 41% run-up in U.S. home prices, leaves affordability strained to a historic degree.
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