The average rate on a 30-year mortgage in the U.S. fell this week to its lowest level in 19 months, reflecting a pullback in Treasury yields ahead of an expected interest rate cut from the Federal Reserve next week. The rate fell to 6.20% from 6.35% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.18%.
A “For Sale” sign is displayed in front of a home in Morton Grove, Ill., Sunday, August. 25, 2024. The average rate on a 30-year mortgage in the U.S. fell this week to its lowest level in 19 months, reflecting a pullback in Treasury yields ahead of an expected interest rate cut from the Federal Reserve next week.
Mortgage rates are influenced by several factors, including how the bond market reacts to the Fed’s interest rate policy decisions. That can move the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.Average long-term US mortgage rates holds at 6.35% this week ahead of expected Fed rate cutAverage rate on a 30-year mortgage eases to 6.
“Rates continue to soften due to incoming economic data that is more sedate,” said Sam Khater, Freddie Mac’s chief economist. “But despite the improving mortgage rate environment, prospective buyers remain on the sidelines, as they negotiate a combination of high house prices and persistent supply shortages.”
The elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have put off many would-be homebuyers, extending the nation’s housing slump into its third year.Despite the sales slump, home prices have kept rising, pushing the limits of what homebuyers can afford. The national median home sales price rose in July on an annual basis for the 13th month in a row to $422,600, just shy of the all-time high set in June, according to the National Association of Realtors.
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