U.S. 30-Year Fixed-Rate Mortgage Drops to Lowest Level Since May 2023

• The average 30-year fixed-rate mortgage fell to 6.46%, its lowest since May 2023.
• Rates are still not low enough to significantly boost housing market demand.
• Existing home sales rose by 1.3% in July, breaking a four-month decline.

NY, August 22, 2024 (FFN) – The average rate on the widely-used U.S. 30-year fixed-rate mortgage has dropped to its lowest point since May 2023, according to data released by mortgage finance agency Freddie Mac and reported by Reuters. The rate averaged 6.46% for the week ending August 22, a slight decrease from 6.49% the previous week. Despite this dip, experts suggest that rates may need to fall further to significantly boost housing market demand.

This rate is down from 7.23% a year ago, reflecting a broader trend of declining interest rates as economic data softens. Sam Khater, Freddie Mac’s chief economist, noted that while rates have eased, they have not yet reached a level that motivates potential homebuyers. “We expect rates will likely need to decline another percentage point to generate buyer demand,” Khater said.

In a related update, the National Association of Realtors (NAR) reported a 1.3% increase in existing home sales for July, breaking a four-month streak of declines. Despite this, NAR’s chief economist, Lawrence Yun, pointed out that the market remains sluggish. “Consumers are seeing more choices, and affordability is improving due to lower interest rates,” Yun commented, though he acknowledged that the modest gain has not yet translated into a strong recovery in home sales.

Key Terms: Mortgage rates, Freddie Mac, Housing market, Home sales, Interest rates