Mortgage rates keep edging lower. Freddie Mac today released the results of its Primary Mortgage Market Survey, showing the 30-year fixed-rate mortgage (FRM) averaged 6.20% this week.
“Mortgage rates have fallen more than half a percent over the last six weeks and are at their lowest level since February 2023,” said Sam Khater, Freddie Mac’s chief economist.
“Rates continue to soften due to incoming economic data that is more sedate. 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.”
But the Mortgage Bankers Association is reporting stronger-than-usual demand. It reports mortgage applications increased by 1.4% last week over the previous week.
“Treasury yields have been responding to data showing a picture of cooling inflation, a slowing job market, and the anticipated first rate cut from the Federal Reserve later this month,” said Joel Kan, MBA’s deputy chief economist.
“With rates almost a full percentage point lower than a year ago, refinance applications continue to run much higher than last year’s pace.”
Improved affordability
Fall is not a big home-buying season but real estate marketplace Zillow says that, with the big improvements in affordability, this fall could be different.
"Late summer may be an opportunity for buyers who have been waiting in the wings for a monthly mortgage payment they can qualify for," said Skylar Olsen, Zillow’s chief economist.
"Buyers have more options to choose from for two reasons. For one, it's easier to qualify for more of the homes on the market now that mortgage rates are a bit lower. Beyond that, more inventory is becoming available — enough to improve buyer negotiating power.”
Olsen says attractive properties in hot markets are still selling quickly, but some metros — or neighborhoods within them — have flipped further in favor of buyers.