Mortgage rates dip to 6.6% to mark the lowest level since May 2023
Mortgage rates continued their descent this week to mark their lowest level since May 2023, welcome news for homebuyers who have been waiting on the sidelines for rates to drop.
The 30-year fixed-rate mortgage averaged 6.6% as of Jan. 11, a decrease from last week’s 6.66%, according to Freddie Mac‘s Primary Mortgage Market Survey released on Thursday.
The 15-year fixed-rate mortgage averaged 5.76% this week, down from 5.87% the prior week.
HousingWire’s Mortgage Rates Center showed Optimal Blue’s average 30-year fixed rate on conventional loans at 6.709% on Thursday, up from 6.66% recorded at the same time last week.
“This is an encouraging development for the housing market and in particular first-time homebuyers who are sensitive to changes in housing affordability. However, as purchase demand continues to thaw, it will put more pressure on already depleted inventory for sale,” said Sam Khater, Freddie Mac’s chief economist.
Housing starts declined 9% in 2023, an indication that homebuyers looking to purchase a new construction home may continue to struggle with the lack of inventory this year.
With mortgage rates continuing their downward trend last week with softer inflation readings – the so-called core consumer price index that excludes volatile food and energy prices – pulling them lower, mortgage demand was up in the week ending Jan. 12 compared to a week earlier.
“Mortgage applications jumped more than 10% as a result, with solid increases for both refinances and home purchases. The continuing decline in mortgage rates is promising for households looking to buy a home in the coming months,” said Bob Broeksmit, Mortgage Bankers Association’s (MBA’s) president and CEO.
Purchase apps increased by 9% from one week earlier on a seasonally adjusted basis, and refis were up 11% in the same period.
This week, December’s retail sales report showed strong consumer spending even after adjusting for holiday spending and inflation as policy makers mull rate cuts.
Eyes on the Fed’s rate cut timeline
After the Federal Reserve began its restrictive monetary policy in March 2022, officials anticipated at least three rate cuts in 2024 at their December meeting. The Fed next meets on Jan. 30-31.
According to projections from central bank officials, rates would be slashed to a median 4.6% by the end of 2024 from the current federal funds rate range of 5.25%-5.5%.
More than 57% of investors have priced in at least a quarter-point cut in March, according to the CME Group’s FedWatch tool. That is down from 67% last week and roughly 71% about a month ago.
Fed Governor Christopher Waller advocated moving carefully with lowering interest rates while acknowledging that cuts are likely this year.

“When the time is right to begin lowering rates, I believe it can and should be lowered methodically and carefully,” Waller said in prepared remarks at the Brookings Institution on Tuesday.
“In many previous cycles … the FOMC cut rates reactively and did so quickly and often by large amounts. This cycle, however, … I see no reason to move as quickly or cut as rapidly as in the past,” he added.
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