Mortgage rates edged back down this week, with the average rate for a 30-year, fixed-rate mortgage falling to 6.56%, down from 6.58% last week, according to Freddie Mac’s Primary Mortgage Market Survey.
A year ago at this time, the average rate for a 30-year was 6.35%.
“Mortgage rates are at a 10-month low,” says Sam Khater, chief economist for Freddie Mac, in a statement. “Purchase demand continues to rise on the back of lower rates and solid economic growth. Though many potential homebuyers still face affordability challenges, consistently lower rates may provide them with the impetus to enter the market.”
As of August 28, the average rate for a 15-year fixed-rate mortgage was 5.69%, unchanged from last week but up from a year ago when it was around 5.51%.
“Rates had moved higher earlier last week after producer price data came in hotter than expected, which made markets nervous about a possible delay in Federal Reserve rate cuts,” says Samir Dedhia, CEO of One Real Mortgage, in a statement. “But Fed Chair Jerome Powell helped ease those concerns on Friday, hinting that the Fed still expects to cut rates soon – possibly as early as September – which caused rates to fall going into the weekend.”
“Since then, mortgage pricing has remained steady,” Dedhia says. “It’s a reminder of how sensitive rates are to inflation data and Fed signals. Investors are now increasingly confident that a 25-basis point cut is on the table next month, and some are even speculating that we could see a larger 50-point cut depending on upcoming economic data. This shift in sentiment is helping stabilize rates and boost borrower confidence.”
“For buyers and homeowners, this means more opportunity,” he adds. “Even small dips in rates improve affordability for those still searching for homes, and for current homeowners, it could make a refinance worthwhile. With rates now nearly half a point below their summer peak, consumers may want to re-evaluate their options and run the numbers again.”
Photo: Jakub Żerdzicki