Purchasing a home just became a lot cheaper, thanks mostly to the Federal Reserve’s decision to put its interest rate hikes on hold for now.
Mortgage buyer Freddie Mac says the average 30-year fixed rate mortgage plunged to 4.06 percent this week, down from 4.28 percent last week. That’s the steepest weekly drop in a decade.
Last week, Fed chairman Jerome Powell said the U.S. economy faces several headwinds, including slowing global growth, a trade war with China, and fading impacts of last year’s tax cuts. Fed policymakers signaled they were unlikely to raise rates this year, after projecting two hikes in December.
Lower mortgage rates, slowing home price increases and a pickup in the number of available homes appear to be rejuvenating home sales after a slowdown last year.