Long-term mortgage rates fall to below 7%, but Fed's rate hike may pull rates back up

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Long-term mortgage rates fell to below 7% mark this week, but yesterday's interest rate hike is likely to pull the rates up again.

30-year fixed-rate mortgage averaged 6.95% with an average 0.8 point for the week ending Nov. 3, down from last week when it averaged 7.08% and higher than 3.09% a year ago, according to the Freddie Mac Primary Mortgage Survey.

15-year fixed-rate mortgage averaged 6.29% with an average 1.2 point, down from last week when it averaged 6.36% and up from 2.35% a year ago.

5-year Treasury indexed hybrid adjustable-rate mortgage averaged 5.95% with an average 0.2 point, down from last week when it averaged 5.96% and higher than 2.54% a year ago.

"Unsure buyers navigating an unpredictable landscape keeps demand declining while other potential buyers remain sidelined from an affordability standpoint. Yesterday's interest rate hike by the Federal Reserve will certainly inject additional lead into the heels of the housing market," Sam Khater, Freddie Mac's chief economist, said.

The Federal Open Market Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent.

Mortgage applications declined for the sixth consecutive week despite a slight drop in rates, Joel Kan, Mortgage Bankers Association's vice president and deputy chief economist, said.

"These elevated rates continue to put pressure on both purchase and refinance activity and have added to the ongoing affordability challenges impacting the broader housing market, as seen in the deteriorating trends in housing starts and home sales," Kan noted.