Mortgage rates are falling at the fastest pace since the 2008 housing market crash

• The 30-year fixed mortgage rate slipped to 7.17% last week from 7.37% in the prior week.
• Going back to late October, the key borrowing rate has tumbled 69 basis points.
• That's the biggest drop during a five-week period since late 2008, Bloomberg reported.

The housing market is getting a bigger jolt as mortgage rates continue to tumble along with US Treasury yields.

In the week ended December 1, the 30-year fixed rate slipped to 7.17% from 7.37% in the prior week, according to the Mortgage Bankers Association.

Rates have plunged on expectations the Federal Reserve is done hiking rates and poised to pivot to cuts next year, sending benchmark bond yields and other borrowing costs lower too.

In fact, the 30-year fixed mortgage rate has sustained its biggest drop in a five-week period since late 2008, diving 69 basis points in that span, Bloomberg reported. 

In response to falling rates, applications for home refinancing jumped 14% in the latest week, and were 10% higher from the same week in 2022. 

"Refinance applications saw the strongest week in two months, increasing on a year-over-year basis for the second consecutive week for the first time since late 2021," MBA Vice President Joel Kan said in the report. "The overall level of refinance applications is still very low, but recent increases could signal that 2023 was the low point in this cycle for refinance activity, consistent with our originations forecast."

However, this hasn't translated into higher buying demand yet, with applications for a mortgage to purchase a home down 0.3% during the week and 17% lower from last year. High prices and a lack of housing inventory continue to bear down on homebuyers.

But buyers can expect mortgage rates to continue sliding next year, analysts predict, with the 30-year mortgage rate settling in the 6%-7% range. That's down from 8% in October.