The average contract rate for mortgages inched down this week to 6.81%, but it remains to be seen whether the drop will continue in the upcoming weeks.
The 30-year fixed-rate mortgage - the most popular loan term in the United States - moved down by 0.03% in the week ending Nov. 27. For perspective, the average rate on the 30-year loan was 7.22% in the same week a year ago.
"The 30-year fixed-rate mortgage moved down this week, but not by much," Sam Khater, Freddie Mac's chief economist, said. "Rates have been relatively flat over the last few weeks as the market waits for more clarity on specific economic policies."
In contrast, the contract rate for the 15-year fixed-term mortgage climbed in the same week to 6.1% from the previous 6.02%, according to data from Freddie Mac's Primary Mortgage Market Survey.
How Much Will Buyers Need to Purchase a Home With Today's Rate?
At 20% Down Payment
The median price of a typical single-family home in the US as of October was $434,271, per real estate website Redfin. For our calculations, we are assuming an individual is purchasing a house at the current mortgage rate of 6.81% and with a down payment of 20%.
A 20% down payment for a median-priced home is around $86,854. The monthly mortgage payments would then total to $2,267, which equals to $27,206 annually. On average, buyers who close this week will be able to save around $6.95 compared to those who closed last week when the mortgage rate for the 30-year loan term was 6.84%.
At 3.5% Down Payment
Hopeful homebuyers looking to apply for FHA loans require only a 3.5% down payment. We used the same home price and mortgage rate for this calculation.
With a 3.5% down, buyers should expect to pay $15,199 for the loan. This would then result in mortgage payments of $2,734 per month or $32,817 per year on a mortgage rate of 6.81%. Buyers who close this week will be able to save $7.39 monthly or $88.68 yearly than those who closed in the previous week.
