Mortgage rates decreased this week, with the average rate for a 30-year fixed-rate mortgage dropping to 6.17%, down from an average of 6.19% 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 6.72%.
“Mortgage rates decreased for the fourth consecutive week,” says Sam Khater, chief economist for Freddie Mac, in a statement. “The last few months have brought lower rates and homebuyers are increasingly entering the market.”
As of early Thursday, the average rate for a 15-year fixed-rate mortgage this week was 5.41%, down from 5.44% last week and down from 5.99% a year ago.
On Wednesday, the Federal Open Market Committee voted to slash the fed funds rate by 0.25%. That cut had already been priced into the market.
After Freddie Mac’s report was issued on Thursday, rates corrected, with the 30-year reaching 6.3%.
Despite the subsequent rise, the Fed rate cut offers, at the least, some psychological benefit to consumers and lenders.
“After weeks of steady declines, this continued improvement comes despite some hesitation in the market following the Fed’s recent rate cut,” says Samir Dedhia, CEO of One Real Mortgage, in a statement. “While the Fed lowered rates by 0.25 percent, Chair Powell struck a cautious tone about future cuts – especially in December – which pushed bond yields up slightly and caused a temporary stall in momentum.”
“Still, the broader trend remains favorable,” Dedhia adds. “The odds of a December cut have only dipped from 70 percent to 65 percent, and signs of a slowing labor market and softening inflation continue to support lower long-term borrowing costs.”
“For consumers, it’s a window of opportunity,” Dedhia says. “Rates aren’t falling dramatically this week, but they’re holding near their lowest levels in nearly a year. With more homes hitting the market and prices leveling off, the current environment presents real possibilities for both buyers and those considering a refinance. The Fed made it clear that future moves will be driven by data. So staying ready to act could pay off.”
Photo: Alison Pang