Mortgage rates fall for a fourth week to 7.11%, the lowest in seven weeks

The 30-year fixed mortgage rate averaged 7.11% in the week to November 12, down from 7.18% a week earlier and the lowest in seven weeks, Freddie Mac reported. It was the fourth weekly decline in a row, but the rate is still 0.87 percentage point above a year ago.

Four falls took 0.29 point off the October peak

Freddie Mac's weekly survey put the 30-year rate at 7.11%, against 6.24% a year earlier, and the 15-year rate at 6.45%, against 6.57% a week earlier and 5.49% a year earlier. The agency said the figure is "an average of loan rates offered the prior Thursday through Wednesday", so it reflects the days before the survey is published.

According to the agency's rate history, the 30-year rate stood at 7.40% in the surveys of October 8 and October 15, then fell to 7.32% on October 22, 7.24% on October 29 and 7.18% on November 5. The drop from the peak is 0.29 percentage point (computed). The last time the survey was lower was September 24, when it read 7.03%, and the rate then jumped to 7.28% on October 1.

What the decline is worth on a monthly payment

On a $400,000 30-year loan, the principal-and-interest payment is about $2,690.83 a month at 7.11%, against about $2,769.52 at the October peak of 7.40%, a difference of about $78.69 a month (computed). The same loan cost about $2,460.27 a month at last year's 6.24%, so the borrower still pays about $230.56 more a month than a year earlier (computed). The calculation assumes a standard amortizing loan and ignores taxes, insurance and fees.

A survey average, not a live quote

The survey covers loan applications submitted to Freddie Mac from lenders across the country, so it is an average of past offers, not a live quote. FinanceInTime reported on November 11 that mortgage rates had fallen by less than Treasury yields since early October. Freddie Mac publishes its next survey on Thursday, November 19, at 12 p.m. ET.

A seven-week low still leaves payments well above last year's

We think the fourth weekly fall is real but modest: it returns the survey rate to just above its September 24 level and recovers about four fifths of the 0.37-point rise since then, while payments remain about $230 a month higher than a year ago. Our reading is that affordability is improving at the margin, not turning. The opportunity is for buyers who were priced out at 7.40%, and for sellers whose listings have sat; the threat is that a weekly average can reverse quickly if Treasury yields rise again.

We would weigh the next two surveys more heavily than this one, and we expect the rate to stay above 7% in the coming weeks unless Treasury yields fall further; that is a forecast, and it would be wrong if the rate drops below 7%. Regional differences are large, and this national average says little about any single market.

The view in this final section is FinanceInTime's editorial opinion, for information only. It is not investment, tax, legal or other advice, and it does not take your circumstances into account. Forecasts are uncertain and past results do not guarantee future ones.