Key U.S. mortgage rate drops to lowest since March, Freddie Mac says

Date:

Share post:


By Makailah Gause

NEW YORK (Reuters) – The average interest rate on the popular U.S. 30-year fixed-rate mortgage fell to its lowest level since mid-March this week, a welcome development for a housing market struggling to find its footing and one that may continue if the Federal Reserve cuts rates as expected in the months ahead.

The 30-year fixed-rate mortgage averaged 6.77% during the week ending July 18, the lowest level since mid-March, down from 6.89% in the prior week, mortgage finance agency Freddie Mac said on Thursday.

It averaged 6.78% during the same period a year ago. Data shows that homebuyers are not responding to lowering rates yet with purchase application demand remaining roughly 5% below where it was in the spring, Freddie Mac’s chief economist said.

“Sometimes as rates decline, demand weakens, and the apparent paradox is driven by buyers making sure rates don’t decline further before they decide to purchase,” Chief Economist Sam Khater said in a statement.

The housing market has been one of the sectors most affected by the interest rate increases from the Fed since early 2022. In 2023, the volume of existing-home sales reached the lowest level since 1995 and the supply of home sales remained tight.

Many homeowners are reluctant to sell because their existing home loans are still locked in at much lower rates, and buying another house likely would mean a higher rate and added cost. Pinched inventory continues to keep house prices inflated.

Economists are hopeful that the anticipated start of rate cuts by the Fed – perhaps as early as September – could flow through to support the housing market through lowered borrowing costs in the months ahead.

Signals about the market’s halting recovery are mixed. Overall housing starts rose 3.0% in June, but that was driven by apartment projects, not single-family home construction, where starts fell to an eight-month low last month, the Census Bureau said on Wednesday.

Data on existing home sales for June is due next week from the National Association of Realtors. Sales of pre-owned homes had fallen for three straight months through May.

(Reporting By Makailah Gause; Editing by Dan Burns)



Source link

Alexandra Williams
Alexandra Williams
Alexandra Williams is a writer and editor. Angeles. She writes about politics, art, and culture for LinkDaddy News.

Recent posts

Related articles

Satire publication The Onion buys Alex Jones' Infowars at auction with help from Sandy Hook families

The satirical news publication The Onion won the bidding for Alex Jones' Infowars at a bankruptcy auction,...

Video appears to show a Ukrainian Leopard tank taking out a column of Russian armored vehicles

Ukraine released a video showing an attack on a Russian armored convoy.The brigade said a Leopard 2...

Iowa's list of the 35 lowest-performing schools now includes 12 from Des Moines

A dozen schools in Iowa's largest public school district have been identified by the state as "in...

At 8:21 a.m.: SpaceX set for Falcon 9 rocket launch from Florida’s Space Coast

SpaceX crews are preparing to launch a Falcon 9 rocket Thursday morning from Florida’s Space Coast.SpaceX is...

Sinkhole Swallows Motorcycles in Madrid After Water Pipe Breaks

A sinkhole caused by a burst water pipe forced a partial road closure in Madrid, Spain, on...

First-Ever Amber Discovered in Antarctica Shows Rainforest Existed Near South Pole

Imagine a time machine that could whisk you back to the age of the dinosaurs. Suddenly, you...

China's president will unveil a megaport in Peru, but locals say they're being left out

CHANCAY, Peru (AP) — On the edge of Peru’s coastal desert, a remote fishing town where a...

This 'morphing' wheel could allow wheelchairs to climb stairs

STORY: :: KIMMThis is not your average wheelchair.Researchers in South Korea have developed what they claim is...