The average rate on a 30-year U.S. mortgage ticked down to 6.72% this week, returning to its level from three weeks ago and offering only modest relief to buyers squeezed by record prices and high borrowing costs, Freddie Mac said. The 15-year fixed rate also eased to 5.85%.
What Happened: The slight dip follows the Federal Reserve's decision to hold its benchmark rate steady this week, but housing economists caution the move is unlikely to flip the market from slump to surge. Many forecasters still expect the 30-year average to remain above 6% through year-end.
Demand remains soft. Pending home sales fell 0.8% in June and are down 2.8% from a year earlier, a sign that completed sales could weaken further in the coming months. Mortgage applications also slipped to their lowest level since May, with the Mortgage Bankers Association citing ongoing economic and job-market uncertainty.
Freddie Mac's weekly survey shows rates barely budging for a month as markets balance stubborn inflation against hopes for later Fed cuts. The lender noted the 30-year average is nearly unchanged from a year ago (6.73%), showing how affordability has stayed tight even as inventories improve at the margins.
Why It Matters: Lisa Sturtevant, chief economist at Bright MLS, tells the Associated Press that the latest move is welcome but too small to meaningfully revive activity. "If inflation expectations continue to be high, mortgage rates could also remain higher," explains Sturtevant.
A turnaround likely depends on clearer progress on inflation and the path of Fed policy, both factors that still tilt toward a”higher for longer” environment, especially after Chair Jerome Powell signaled patience on rate cuts.
For would-be buyers and owners tracking daily moves, the 10-year Treasury yield, which is often used as a guide for pricing mortgages, has hovered in the mid-4% range per TradingEconomics data, reinforcing the narrow band for long-term rates this summer. Unless that benchmark declines decisively, affordability gains will remain incremental.
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