Mortgage rates dropped for the fourth time in five weeks, as
The average rate of a fixed 30-year mortgage came in at 6.35%, according to Freddie Mac's weekly Primary Mortgage Market Survey. The rate took an 11 basis point dive
The 15-year fixed-rate average also took an 11 basis point drop from the previous week, falling to 5.51% from 5.62%. Over the same seven-day period in 2023, the average was over a full percentage point higher at 6.55%.
"Mortgage rates fell again this week due to expectations of a Fed rate cut," said Freddie Mac Chief Economist Sam Khater in a press release.
While rates should likely fall further, the recent downward trend thus far
"While potential homebuyers are watching closely, a rebound in purchase activity remains elusive until we see further declines," Khater added.
The refinance segment, though, is managing to sustain some of the momentum it began seeing several weeks ago, providing a boost to lenders. Much of the recent refinance activity comes from borrowers who took out their
While consensus opinions indicate a forthcoming cut in the Fed funds rate, which holds influence over lending conditions, some experts are tempering expectations of the outcome from any of the central bank's decisions
"Uncertainty remains about where the Fed funds rate will settle. Despite a slowdown from a torrid pace of activity, economic growth remains strong, fueled by household consumption and fiscal policy tailwinds," said Orphe Divounguy, senior economist at Zillow Home Loans in a research statement on Wednesday.
"In short, monetary policy may be restrictive but perhaps not so much to justify a large decline in the Fed funds rate," Divounguy noted.
The next meeting of the Federal Open Market Committee is scheduled to take place from Sept. 17 to 18.
Freddie Mac's new data corresponded to movements in 10-year Treasuries over the past week, after yields closed at 3.86% on Aug. 22. After an immediate decline, yields began inching upward again this week to open at 3.84% Thursday morning.
They rose higher, though, after the opening bell to 3.87% by midmorning following the release of
Other weekly rate trackers similarly showed rates trending downward over the past seven days. The 30-year mortgage rate came in at 6.47% on Thursday morning,
Meanwhile, Zillow's rate tracker showed the 30-year rate falling below the 6% threshold, dropping 16 basis points to 5.88% from last week's overall average of 6.04%.
Markets will be keeping an eye on inflation data to come, as well as the government's August jobs reports, both of which hold the potential to influence mortgage lending in the next weeks, Divounguy said.
"While inflation is expected to keep moderating, any deviation from the expected path or a larger than anticipated loosening of the labor market could trigger more mortgage rate volatility," he said.
