M
ortgage rates have dropped to their lowest level in six weeks, boosting purchase applications and home tours. Key points include:

    The 30-year fixed-rate mortgage averaged 6.69% this week, down from last week's 6.81%, and the lowest since late October.

    Mortgage applications rose 2.8% for the week, with the seasonally adjusted purchase index up 6% from the previous week and at its highest level since January.

    Despite declining rates, affordability remains a concern, particularly for moderate-income buyers who may be priced out due to rising home prices and projected interest rates through 2025.

    As the Federal Reserve prepares to meet on December 17-18, potential homebuyers are taking advantage of lower mortgage rates. However, where rates go next will depend on how the Fed views the economy, with several key reports set to be released before their decision.

    Consumers appear to be responding to declining rates with increased activity, with more people touring homes and keeping an eye on available properties. Redfin's Homebuyer Demand Index continues to climb, nearing its highest level since September 2023.

    Buyer demand may be driven by post-election confidence and the realization that mortgage rates are unlikely to drop significantly in the near future. As a result, buyers are pushing forward with negotiations for good deals, particularly on homes that have been sitting on the market since the summer or early fall.