The average rate for a benchmark 30-year mortgage has slipped back under 7 percent for the first time in four months, inching down 8 basis points (0.08 percentage points) over the past week to 6.95 percent, with the probability of the Fed starting to cut rates in March of next year having ticked up to 84 percent and the futures market now predicting that the Fed is likely to cut the federal funds rate by over a full percentage points by the end of 2024, the probabilities of which are being priced-in to current rates and the resultant yield curve.

At the same time, purchase mortgage application volume remains down, with the average 30-year mortgage rate, which has dropped 84 basis points since hitting 7.79 percent at the end of October, still 64 basis points higher than at the same time last year, 134 basis points above average over the past 30 years, and 430 basis points higher than in early 2021, with the average rate for a 30-year jumbo still 22 basis points over 7 percent.

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