Mortgage rates fell this week, with the average rate for a 30-year dropping to 6.50%, down from 6.56% last week, according to Freddie Mac’s Primary Mortgage Market Survey.
That’s up from an average rate of 6.35% the same week one year ago.
“Mortgage rates continue to trend down, increasing optimism for new buyers and current owners alike,” says Sam Khater, chief economist for Freddie Mac, in a statement. “As rates continue to drop, the number of homeowners who have the opportunity to refinance is expanding. In fact, the share of market mortgage applications that were for a refinance reached nearly 47 percent, the highest since October.”
The average rate for 15-year fixed-rate mortgage was 5.60%, down from 5.69% last week but up from 5.47% a year ago.
Samir Dedhia, CEO of One Real Mortgage, notes that the drop “marks the lowest levels in nearly a year, signaling a potential turning point for buyers and homeowners.”
“This dip is especially meaningful given the rollercoaster of economic data we’ve seen lately,” Dedhia says. “While rates had crept higher after July’s PPI report, optimism returned as Fed Chair Jerome Powell hinted that the central bank is likely to cut rates in September, a view now widely shared across markets.”
“This week’s numbers continue a broader trend that began back on Aug.1, when a weaker-than-expected jobs report helped push mortgage rates back into the 6.5 percent range, a territory we hadn’t seen since Oct. 3 of last year,” he says. “Back then, strong labor data triggered a spike in rates that sent the 30-year fixed soaring above 7.25 percent. Since then, we’ve been clawing our way back. With rates now flirting with 11-month lows, momentum is building again as market watchers anticipate action from the Fed.”
“Lower mortgage rates are already making a meaningful difference,” Dedhia adds. “Buyer activity has picked up compared to this time last year, and refinancing is on the rise, now making up nearly 47 percent of all mortgage applications, the highest share we’ve seen since last October. For homebuyers who’ve been sitting on the sidelines, these drops in rates are expanding affordability and giving them new confidence. And for homeowners, the window to refinance and save is opening wider. With expectations growing for a rate cut at the Fed’s next meeting, this could be just the beginning of a stronger housing market heading into the fall.”
Photo: Susan Q Yin