The average rate on 30-year mortgages declined to 6.2 percent this week, the lowest point since early 2023.
Mortgage rates fell this week to the lowest point in over a year and a half, as markets reacted to economic data showing a slowing economy.
The average rate on 30-year mortgages, the most popular home loan in the United States, dropped to 6.2 percent this week, Freddie Mac reported on Thursday. The decline, from 6.35 percent a week earlier, left rates more than half a percentage point lower than six weeks ago.
Here’s what else to know about the decline in mortgage rates:
This week’s dip extends a downward trend that started in April and intensified in early August, when mortgage rates saw their biggest weekly drop of the year.
But mortgage costs are still twice as high as they were three years ago, when the average 30-year rate stood at around 3 percent. Many potential sellers remain reluctant to put their homes on the market, unwilling to part with lower rates on their existing mortgages.
Mortgage rates are influenced by a range of factors, including moves by the Federal Reserve and the market-based yields on government bonds.
U.S. Treasury yields have drifted lower in recent months, responding to economic data showing a slowing economy, with inflation cooling and the job market shifting to a lower gear.
Next week, the Fed is expected to start cutting interest rates for the first time since early 2020.
There are signs that lower borrowing costs have started to spur more activity among home buyers and sellers. But significant movement in the market is likely to take more time. “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,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
