Mortgage rates at 13-month low, may continue to fall after Fed announcement

Pearland - No. 56 in Texas

Median home value: $208,900

Median rent: $1,272

Example home listing: 12203 Hidden River Lane, Pearland. $349,000. See the listing. Pearland - No. 56 in Texas

Median home value: $208,900

Median rent: $1,272

Example home listing: 12203 Hidden River Lane, Pearland. $349,000. See the listing. Photo: Houston Association Of Realtors Photo: Houston Association Of Realtors Image 1 of / 30 Caption Close Mortgage rates at 13-month low, may continue to fall after Fed announcement 1 / 30 Back to Gallery

Mortgage rates are at a 13-month low, falling another 4 basis points from last week, according to the latest mortgage rate survey by Freddie Mac. The average rate for a 30-year fixed-rate mortgage is 4.28 percent, down from 4.94 percent in November.

The mortgage finance company called four-month dip in mortgage rates "dramatic," and noted that the lower rates, combined with moderating house prices, will likely help potential homebuyers.

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"The combination of improving affordability and more inventory than the last few spring selling seasons should lead to improved home sales demand," Freddie Mac wrote in its latest report.

Danielle Hale, chief economist for the National Association of Realtors, predicted mortgage rates may fall even further after the Federal Reserve's announcement it would hold interest rates steady after revising its forecast for economic growth downward.

"Looking ahead to next week, we could see rates fall even further based on the decision to hold rates steady combined with guidance that emphasized patience," Hale said. "The strong economy along with a job market that's finally yield wage gains is a big plus for buyers. Coupled with lower mortgage rates, these factors will likely ensure a steady stream of demand for sellers this spring, despite continued increases in home prices."