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Mortgage rates today: Wednesday, Nov. 23, 2022
On Wednesday, Nov. 23, 2022, the average interest rate on a 30-year fixed-rate mortgage fell six basis points to 6.665% APR. The average rate on a 15-year fixed-rate mortgage dropped nine basis points to 5.944% APR, and the average rate on a five-year adjustable-rate mortgage grew seven basis points to 6.315% APR, according to rates provided to NerdWallet by Zillow. The 30-year fixed-rate mortgage is 17 basis points higher than one week ago and 368 basis points higher than one year ago. A basis point is one one-hundredth of one percent. Rates are expressed as an annual percentage rate, or APR.
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Mortgage rates this week
Mortgage rates edged higher in the week ending Nov. 23, reestablishing this year's upward trend.
The 30-year fixed-rate mortgage averaged 6.61% APR, up four basis points from the previous week's average.
The 15-year fixed-rate mortgage averaged 5.93% APR, up three basis points from the previous week's average.
The five-year adjustable-rate mortgage averaged 6.28% APR, up three basis points from the previous week's average.
It was a reversal of the previous week, when mortgage rates plunged after a relatively benign inflation report. This week, mortgage rates resumed their long upward march that began early this year.
The average rate on the 30-year fixed-rate mortgage was 3.49% in January. It rose to 6.94% in October, according to NerdWallet's mortgage rate index. That increase in interest rates, combined with rising house prices, has made homes unaffordable to many would-be buyers.
The Mortgage Bankers Association began to track affordability this year by calculating the median payment on each month's batch of loan applications, relative to income. The median payment was $1,526 in January and $2,012 in October. And that's before property tax and insurance.
Many buyers were sidelined by costlier monthly mortgage payments, and home sales plummeted. According to the National Association of Realtors, 371,000 existing homes were sold in October. In contrast, 462,000 homes were sold in October 2019. (More than a half-million homes were sold in the peculiar Octobers of 2020 and 2021, during the depth of the pandemic.)
There was a dollop of good news in the NAR's report: Supply is rising. Supply calculates how long it would take to sell all the homes on the market at the current sales pace. In October, supply rose to 3.3 months from the previous month's 3.1 months. That means the housing market is moving from one that's decidedly in favor of sellers to one where sellers and buyers have more equitable negotiating leverage.
When negotiating a home purchase, price isn't the only factor. Buyers can also ask sellers to contribute to closing costs or to pay for temporary buydowns, which give buyers a break on the mortgage rate for the initial one to three years of the loan.
November mortgage rates forecast
Mortgage rates have been rising steadily since August, and there's little reason for them to reverse course in November. Inflation continues to run higher than the Federal Reserve wants, and the central bank will almost surely raise the federal funds rate again in mid-December. Both factors — inflation and the Fed's rate-raising campaign to quell inflation — should push mortgage rates upward in November.
What happened to mortgage rates in October
Rates reached a milestone in October: The average rate on the 30-year fixed-rate mortgage surpassed 7% for the first time since April 2002. Rates on the 15-year fixed-rate mortgage and the 5-year ARM went up, too.
Interest rates tend to be higher when inflation is high, and the link between rising prices and mortgage rates was evident in October. Inflation remained elevated, with the September Consumer Price Index showing that prices had risen 8.2% over the previous 12 months. It was virtually the same as the August reading, dashing hopes that the inflation rate would improve.
At the beginning of October, NerdWallet predicted that mortgage rates were "likely to keep on rising in October." That's what happened, as the average rate on the 30-year mortgage went up week by week.