US Mortgage Rates Hit Lowest Since May Last Year... 30-Year Fixed at 6.47%

Mortgage rates in the United States have fallen to their lowest level in 1 year and 3 months.

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According to Freddie Mac, a U.S. government-sponsored mortgage company, the average rate for a 30-year fixed-rate mortgage dropped by 0.25 percentage points to 6.47% as of the 8th (local time). This is the lowest level since May 2023. It is also the largest weekly decline in about 9 months.

The mortgage rate for a 15-year fixed-rate mortgage also fell by 0.36 percentage points from the previous week to 5.63%, marking the lowest level since April last year.

Freddie Mac explained the reason for the rate drop, saying, "Although the economy maintains a solid foundation, the poor July employment report likely caused an overreaction in the financial markets." They also predicted that the decline in mortgage rates could increase the purchasing power of potential homebuyers. The refinancing share of mortgage applications in the market is currently at 42%, the highest since March 2022.

[Source=Freddie Mac]

If the current trend continues, demand that has been hesitant due to cost burdens may return, potentially revitalizing the stagnant market. Last year, home sales plunged to their lowest level in about 30 years.

Ralph McLaughlin, Chief Economist at Realtor.com, diagnosed that "the easing of mortgage rates is happening faster than many expected." MJ Agostini, a real estate agent in Berlin, Connecticut, told the Wall Street Journal (WSJ) that transactions have been active over the past two weeks, evaluating that "many people see this as an opportunity as rates go down."

However, there are also points that the problems in the sluggish housing market are not solely due to high rates. Sam Khater, Chief Economist at Freddie Mac, pointed out, "The bigger structural problem is the lack of inventory," adding, "This will not disappear."

This content was produced with the assistance of AI translation services.