Mortgage rates drop, hitting lowest level since April
Freddie Mac said new lower mortgage rates might give homebuyers more purchasing power. But some buyers are still waiting for rates below 5%
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Mortgage rates dropped for a third consecutive week, hitting their lowest level since April.
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Rates for a 30-year mortgage dropped to a new average of 6.63%, dipping from last week’s rate of 6.72%, according to new data from Freddie Mac released Thursday. Based on a monthly average, the mortgage rate is at 6.71%. However, the new weekly rate is still higher than a year ago when the average rate was 6.47%.
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For a 15-year mortgage, the rate dropped 0.10 percentage points this week compared to last. Now, the average rate is 5.75% compared to last week’s 5.85%. Thursday’s rate is slightly higher than a year ago when it was at 5.63%.
“The decline in rates increases prospective homebuyers’ purchasing power,” Freddie Mac’s Chief Economist Sam Khater said in a release.
Homebuyers have been dealing with relentlessly high mortgage rates for years. Rates for a 30-year mortgage haven't been below 6% since early September 2022. Since then, rates have wavered between 6% and 7%. Rates for a 30-year mortgage dropped below 7% in January.
More than half of homeowners said in a Bankrate study from mid-July that there is “no mortgage rate” they would feel comfortable selling or refinancing at — and the same goes for buying another house.
Out of the group of American homeowners who said they would be open to buying a new home this year, about 75% said rates would have to fall below 5% for them to buy. Only 8% said they’d be comfortable buying again with rates at or above 5%.
The last time mortgage rates were below 5% was in April 2022. Prior to rates rising in 2022, rates hadn’t been at or above 5% since May 2010, according to Freddie Mac.