Average rates in the US mortgage market fell to their lowest level since May 2023. In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.60 per cent, down from last week when they stood at 6.66 per cent. A year ago, the average rate was 6.15 per cent.
Sam Khater, Freddie Mac’s chief economist, said: “Mortgage rates decreased this week, reaching their lowest level since May 2023.
“This is an encouraging development for the housing market and in particular first-time homebuyers who are sensitive to changes in housing affordability. However, as purchase demand continues to thaw, it will put more pressure on already depleted inventory for sale.”
The 15-year fixed rate mortgage averaged 5.76 per cent, a fall from 5.87 per cent last week. A year ago, the average stood at 5.28 per cent.
Application spike as US mortgage rates fall
A separate survey from the Mortgage Bankers Association (MBA) noted that rates had also dropped. This led to an upturn in mortgage applications, which rose by 10.4 per cent from one week earlier.
The MBA reported that the average rate for 30-year fixed rate mortgages fell to 6.75 per cent, down from last week’s 6.81 per cent. Meanwhile, the average rate for the 15-year equivalent decreased to 6.24 per cent from 6.41 per cent last week.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage rates declined across all loan types as Treasury yields moved lower last week on incoming inflation data, which helped to support a rise in mortgage applications. The 30-year fixed mortgage rate decreased six basis points to 6.75 per cent, the lowest rate in three weeks.
“Compared to a holiday-adjusted week, both purchase and refinance applications were up, and the increases were heavily driven by the conventional market. Although purchase activity is lagging year-ago levels, refinance applications have improved from their recent low point and have been showing year-over-year gains, albeit at low levels. If rates continue to ease, MBA is cautiously optimistic that home purchases will pick up in the coming months.”
