The average fixed rate on a 30-year mortgage held steady this week and remained at around its lowest level in more than a year, new Freddie Mac data confirmed.
“While rates increased slightly this week, they remain more than half a percent lower than the same time last year,” said Sam Khater, the chief economist at Freddie Mac, in a statement accompanying the data. “In 2023, the 30-year fixed-rate mortgage nearly hit 8 percent, slamming the brakes on the housing market. Now, the 30-year fixed-rate hovers around 6.5 percent and will likely trend down in the coming months as inflation continues to slow. Lower rates are good news for potential buyers and sellers alike.”
Since peaking at 7.79 percent in October 2023, the 30-year fixed-rate mortgage has been steadily declining, though there were some upticks along the way.
Meanwhile, the 15-year fixed-rate mortgage edged up three basis points to 5.66 percent. Despite the slight increase, the rate is down from 6.46 percent last year.
While mortgage rates remain above their pre-pandemic levels and may price first-time home buyers out of the U.S. real estate market, current homeowners have taken advantage of the decline.
Compared to the same time a year ago, refinancing demand rocketed 117 percent.
Overall, mortgage applications rose nearly 17 percent, the highest level since January 2023.
Mortgage Relief and the Housing Market
Market watchers expect further relief in mortgage rates. The 5- and 10-year Treasury yields have engaged in a slow march downward as bond investors have anticipated the Federal Reserve will cut interest rates from their 23-year high.![New attached homes are shown for sale in Vista, Calif., on Oct. 24, 2023. (Mike Blake/Reuters)](/_next/image?url=https%3A%2F%2Fimg.theepochtimes.com%2Fassets%2Fuploads%2F2024%2F08%2F07%2Fid5701426-2024-08-07T110227Z_1_LYNXMPEK760FU_RTROPTP_4_USA-ECONOMY-MORTGAGES-600x400.jpg&w=1200&q=75)
In June, existing home sales plunged by 5.4 percent, the fourth consecutive month of falling transactions. New home sales slipped by 0.6 percent. Pending home sales rebounded by 4.8 percent in June, up from a 1.9 percent decline in the previous month.
“The record-high home prices in most metro markets bring good and bad news,” said NAR Chief Economist Lawrence Yun in a statement. “It’s terrific news for homeowners who are moving ahead in wealth gains. However, it’s difficult for those wanting to buy a home as the required income to qualify has roughly doubled from just a few years ago.”
Industry experts do not believe the housing market will experience a sharp downturn because of the lack of supply and elevated demand. However, market conditions could come into better balance, says Greg McBride, the chief financial analyst at Bankrate.