Sugar, mortgage rates are going down

Think of the housing market like it’s a frozen piece of salmon you left on the kitchen counter—gradually thawing.

This week, mortgage rates fell for the seventh consecutive week to 6.95%, the first time they’ve been below 7% since August. And mortgage applications increased last week for the sixth straight week, according to the Mortgage Bankers Association. The good news was bolstered by reports that the Federal Reserve’s rate-raising spree is likely over.

As for the rent? Maybe not too dang high. In November, rents across the US fell 2.1% compared to the prior year, according to Redfin, due to a boom in rental construction. And you can stop making fun of your friend who lives in NYC and pays $4,500 a month to live under their desk: Rents in Manhattan dropped 2% for the first time in over two years.

Zoom out: Economists at Realtor.com believe mortgage rates could drop to 6% in the new year, but don’t expect the market to get too hot. Home inventory is at a historic low, and the short supply could be further exacerbated by folks who locked in their sub-4% rates years ago and probably won’t be selling anytime soon.—CC