Mortgage rates drop for fifth straight week, still more than double from year ago

Elevated rates have cooled white-hot housing market.
Real estate signs in Antioch, Calif.

Mortgage rates continued a slow but steady decline over the past week, suggesting a small but notable reversal from the meteoric rise they underwent over the past year. 

Thirty-year fixed mortgage rates "averaged 6.31 percent as of December 15, 2022, down from last week when it averaged 6.33 percent," Freddie Mac said in its weekly rate update on Thursday.

Fifteen-year rates, meanwhile, averaged 5.54%, down from 5.67% last week.

Both rates remain more than doubled from a year ago, with 30-year rates at this time in 2021 at 3.12% and 15-year rates at 2.34%. 

“Mortgage rates continued their downward trajectory this week, as softer inflation data and a modest shift in the Federal Reserve’s monetary policy reverberated through the economy,” Freddie Mac Chief Economist Sam Khater said in the release.

“The good news for the housing market is that recent declines in rates have led to a stabilization in purchase demand," Khater said. "The bad news is that demand remains very weak in the face of affordability hurdles that are still quite high.”

The mortgage rate decline comes as the Federal Reserve moves to raise overall interest rates half a percentage point higher in its ongoing efforts to stem inflation in the U.S. economy. 

The Fed said on Wednesday that it "anticipates that ongoing increases in the target range will be appropriate" in order to keep inflation in a targeted low range.