Mortgage rates fell to their lowest level since October 2024 after dropping for four consecutive weeks.
The average rate for a 30-year fixed rate mortgage reached a low of 6.58%, dropping 0.05 percentage points from last week’s rate of 6.63%. And the average rate for a 15-year fixed rate mortgage dropped to 5.71%, a 0.04 percentage point decrease from the previous week’s rate of 5.75%, according to new data for the week ending on August 14 from Freddie Mac.
This new data shows a straight drop in rates for the last four weeks, marking a monthly average rate for a 30-year fixed rate mortgage of 6.67%.
“Purchase application activity is improving as borrowers take advantage of the decline in mortgage rates,” Freddie Mac said in the release.
Although falling mortgage rates make for a more attractive housing market for buyers, other living costs are rising which could deter potential future homeowners from buying even with the lower rates.
Inflation rose at a steady pace in July, but tariffs seem to be starting to appear in the latest Consumer Price Index data — just not across the board quite yet. So far, Goldman Sachs $GS analysts said that U.S. consumers have only been hit with about 22% of tariff costs, according to a Bloomberg report. However, moving forward that number is likely to hit 67% as businesses pass more costs onto buyers.
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%.
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.
– Shannon Carroll contributed to this article.