This week has brought exciting news for home buyers and refinancers alike as they had the chance to secure the lowest mortgage rates since early February, averaging at a favorable 6.73%. Not only that, but the current average mortgage rate is lower than it was at this time last year, making it an opportune moment for those looking to enter the housing market or refinance their existing home loans.
Amidst this positive news, the Federal Reserve has also hinted at a potential cut to its key benchmark rate in the upcoming fall season. The possibility of this rate cut has sparked hopes among prospective home buyers for even lower mortgage rates. However, Lisa Sturtevant, Bright MLS’s chief economist, advises that counting on rates to drop significantly might not be the best strategy.
Sturtevant explains that while the Federal Reserve is likely to cut rates in September, there is no direct correlation between the Fed’s actions and a decrease in mortgage rates. She highlights that the expectations surrounding a September rate cut are already influencing mortgage rates to decrease, emphasizing that waiting for rates to plummet could result in missed opportunities.
Despite the current environment, Sturtevant forecasts that mortgage rates will continue to decline throughout the second half of the year, reaching an average of around 6.4% for a 30-year fixed-rate mortgage by the end of the year. She anticipates further decreases in rates well into 2025, although they are expected to remain above 6% throughout next year.
Sam Khater, Freddie Mac’s chief economist, recognizes that housing affordability remains a pressing issue for home buyers faced with escalating home prices. However, the recent slowdown in home price growth coupled with an increase in housing inventory offers a glimmer of hope for potential home buyers. Khater believes that these trends are positive indicators for the housing market, with the National Association of REALTORS® noting an increase in opportunities for home buyers and a nearly 5% rise in contract signings in June.
Mortgage Rates This Week:
- 30-year fixed-rate mortgages: averaged 6.73%, down from last week’s 6.78%. This figure is an improvement from last year’s average of 6.90%.
- 15-year fixed-rate mortgages: averaged 5.99%, falling from the previous week’s 6.07%. Compared to a year ago, the average is lower than the 6.25% recorded.
In conclusion, the current mortgage rate landscape presents a favorable scenario for home buyers and refinancers. With the potential for rates to decline further coupled with a modest deceleration in home price growth, individuals should carefully consider their options and act decisively in seizing the opportunities available in the housing market.
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