Elevated mortgage rates and rising home prices have kept homeownership out of reach of many would-be home buyers. U.S. home sales are on track for their worst year since 1995.
The combination of mortgage rate declines, firm consumer income growth and a bullish stock market have increased homebuyer demand in recent weeks. However, the improvement is limited given that homebuyers continue to face stiff affordability headwinds.
The average rate on a 30-year mortgage is now at its lowest level since Oct. 24, when it was at 6.54%. This is a welcome trend for prospective home buyers during what's typically a less competitive time of the year for the housing market.
Mortgage rates are influenced by several factors, including the moves in the yield on U.S. 10-year Treasury bonds, which lenders use as a guide to price home loans. The yield has mostly hovered around 4.2% this month.
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