Mortgage Rates Fall For Second Week in a Row, Freddie Mac Says

Average mortgage rates fell to their lowest level since mid-March this week.

The average interest on a 30-year, fixed-rate loan is 6.77%, down 12 basis points from last week, according to Freddie Mac. Mortgage rates have generally been trending down since early May, despite a couple of bumps. They’re far lower than the peak hit last fall but are a far cry from the ultra-low level of the early pandemic.

“Although mortgage-rate relief has not arrived as quickly as many expected, the recent downward trend is encouraging news for homebuyers who have been hindered by high rates,” said Realtor.com Economist Jiayi Xu.

What’s Keeping Mortgage Rates High?

High interest rates have hampered the housing market for nearly two years in lock-step with the Federal Reserve’s fight against inflation.

The Fed has raised its influential fed funds rate to 23-year highs and kept it there for the last 12 months in an effort to tame price increases. Mortgage rates are heavily influenced by the fed funds rate and 10-year Treasury bond yields. Because of those factors, interest on home loans has fallen as the Federal Reserve eyes imminent rate cuts.

However, economists predict buyers and sellers will likely still face interest rates above 6.5% through the rest of 2024. That likely means potential buyers will stay on the sidelines as rates push monthly payments higher, while sellers will remain hesitant to list their homes for sale and trade in the ultra-low mortgage rates of years past.