News Mortgage News The Balance Today: News You Need To Know on Dec. 7, 2022 Lower Mortgage Rates Aren’t Enticing Buyers By Kristin Myers Published on December 7, 2022 Photo: David Sacks/Getty Images Homebuyers are still sitting on the sidelines, though mortgage rates have eased off of recent highs. The average rate on a conventional 30-year fixed-rate loan currently sits at 6.49% according to data from Freddie Mac. About a month ago, the average rate was 7.08%—the highest it had been in more than 20 years. But even as rates dropped, the number of people applying for mortgages still fell, as home loan applications declined 3% last week from the week prior, the Mortgage Bankers Association reported today. The number of applications is 40% lower compared to the same week last year, as higher rates have cooled appetites for purchasing a home. The recent dip in rates has renewed interest in refinancing, however. Those applications jumped 5% last week from the week prior but still sit 86% lower than last year. If people aren’t interested in buying a home now, that’s unlikely to change when the Federal Reserve meets next week and likely hikes rates again. Even if the central bank doesn’t hand us another jumbo-sized rate hike of 75 basis points, a more moderate hike of 50 basis points will still send mortgage rates higher as lending becomes more expensive. And then there’s the future path of rate hikes: It’s expected that the Fed will continue to hike rates next year, which means that interest rates on home loans will continue to go up in 2023. But if you want to purchase a home, there is a tradeoff: With higher rates comes pressure on home prices, as people who are interested in selling drop their asking price in the hopes to entice you to buy. While home prices have remained red hot, price growth is slowing. A recession, (which many investors and economists believe is coming) could depress home prices even further. Stocks are falling today ahead of the latest inflation data and the next moves from the Fed. Despite markets favoring a smaller rate hike of 50 basis points at the bank’s next policy meeting, concerns about the future path of rate hikes and the likelihood of a recession continue to weigh on many investors. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Freddie Mac. "Mortgage Rates." Mortgage Bankers Association. "Mortgage Applications Decrease in Latest MBA Weekly Survey." CME Group. "CME FedWatch Tool."